Adb Issues First Local Currency Bonds in Kazakhstan

AKIPRESS.COM - The Asian Development Bank (ADB) has raised 30.4688 billion tenge (around $80 million) from two new issues of local currency bonds in Kazakhstan.

The milestone dual-tranche transaction marks a series of firsts for ADB with a highly tailored structure adopted to mirror the terms of the underlying loans that are to be funded with the proceeds.The final maturities of the bonds are five and seven years, with an early redemption "call" option from the third and fifth years, respectively.

The bonds pay a floating interest rate linked to the Kazakhstan Consumer Price Index, the first time ADB adopts such a structure in either mainstream or local currency borrowing. Furthermore, the bonds were auctioned and listed on the Kazakhstan Stock Exchange and settled through the Kazakhstan Securities Depositarya first domestic market transaction for ADB in the country.

"This is a landmark in ADB's strategy of delivering local currency funding solutions," said ADB Treasurer Mr. Pierre Van Peteghem.

"We have generated digital results from these bond issues in terms of highly innovative structure, development impact on the domestic capital market, and currency risk mitigation for ADB's borrower." While the bonds were fully placed with institutional...