Supranationals - non-Europe

242 EuroWeek Financing supranationals and agencies

Asian Development Bank (ADB)Rating Aaa, AAA, AAA

Haruhiko Kuroda President

Bindu N Lohani Vice-president (finance & administration)

Mikio Kashiwagi Treasurer

Kazuki Fukunaga Assistant treasurer, funding division

Key oFFiciaLs

The Asian Development Bank (ADB) is a multilateral development bank in the Asia-Pacific region. Founded in 1966 and based in Manila, ADB is owned and financed by its 67 members, of which 48 are from the region and 19 are from other parts of the world.

ADB’s main partners are governments, the private sector, non-government organisations, development agencies, community-based organisations, and foundations.

Although most lending is in the public sector — and to governments — ADB also provides direct assistance to private enterprises of developing countries through equity investments, guarantees, and loans.

overview

Source: ADB (medium & long-term borrowings)

$ bn

0

1

2

3

4

5

6

2005

2004

2006

2007

2008

2009

issuaNce - private pLaceMeNt

Source: ADB

$ bn

- 5.00

10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00

31 D

ec 0

6

31 D

ec 0

7

31 D

ec 0

8

31 D

ec 0

9

outstaNdiNg deBt

*Includes AUS, CAD, EUR, HKD, NZD, GBP, CHG. Data at December 31, 2009. Source: ADB

USD 54%

JPY 8%

Other* 38%

outstaNdiNg issuaNce By curreNcy

Data at June 30, 2010. Source: ADB

$ bn

0 1 2 3 4 5 6 7 8 9

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

+

outstaNdiNg BorrowiNgs By Maturity

Source: ADB

$ bn

Public offerings7.7

Private placement

2.7

Short term funding0.34

issuaNce By type (2009)

Source: Euroweek

Central banks / official

institutions 52% Banks

28%

Fund managers 16%

Other 4%

iNvestor Base By type$2.75BN 5yr FeB 2011

Source: Euroweek

Asia 35%

EMEA 35%

Americas 30%

iNvestor Base By regioN$2.75BN 5yr FeB 2011

Supranationals - non-Europe

Financing supranationals and agencies EuroWeek 243

structuresFX-linked: dual currency note, reverse dual currency note, PRDC, chooser PRDC, digital coupon, TARN

Interest rate-linked: inverse floater, CMS-linked, callable FRN

Others: fixed rate note, zero coupon callable, Uridashi (straight or deep discount), Samurai (structured)

currencies Includes RMB, PHP, HKD, MYR, SGD, THB, INR

private pLaceMeNt poLicy

Source: ADB

$ bn

0

20

40

60

80

100

120

31 D

ec 0

8

31 D

ec 0

9

30 Ju

n 10

totaL assets

Data at December 31, 2009. Source: ADB

$ bn

Vietnam2.27

Indonesia2.24

China2.01

India1.87

Philippines1.19

Bangladesh 1.10

Pakistan 0.94

Kazakhstan 0.69 Sri Lanka 0.35 Nepal 0.35 Regional 1.09

Others1.98

LoaNs By regioN (2009)

Data at December 31, 2009. Source: ADB

$ bnAgriculture & natural

resources0.44

Education0.09

Energy2.13

Finance 0.51

Health & social protection

0.09

Industry & trade 0.10

Public sector management

5.31

Transport & ICT2.35

Water supply & other municipal infrastructure &

services0.81

Multisector1.41

LoaNs By sector (2009)

rank Lead Manager amount $m No of issues

% share

1Daiwa Capital Markets

2,348 10 17.01

2 Goldman Sachs 1,928 3 13.97

3RBC Capital Markets

1,797 12 13.02

4 UBS 1,444 4 10.46

5 Morgan Stanley 1,245 2 9.02

6 HSBC 1,069 10 7.75

7 JPMorgan 887 8 6.43

8 ANZ 695 3 5.03

9 TD Securities Inc 599 9 4.34

10Bank of America Merrill Lynch

496 1 3.6

subtotal 12,509 47 90.63

total 13,803 63 100

Source: Dealogic (March 16, 2010 to March 15, 2011)

top BooKruNNers

pricing date February 14, 2011

value $2.75bn

Maturity date March 15, 2016

coupon 2.5%

spread to benchmark 24.65bp over USTs

Bookrunners Goldman Sachs, HSBC, JPMorgan, RBC Capital Markets

pricing date February 10, 2011

value A$700m

Maturity date February 22, 2018

coupon 6%

spread to swaps 23bp

Bookrunners ANZ, Commonwealth Bank of Australia, RBC Capital Markets

pricing date January 11, 2011

value A$1bn

Maturity date February 15, 2016

coupon 5.5%

spread to benchmark 68bp over ACGBs

Bookrunners ANZ, RBC Capital Markets, Westpac

Source: Dealogic

receNt deaLs

standard & poor’s

AAA, stable outlook

strengths•Conservativefinancialpolicies•Healthyfinancialprofile•Strongshareholders’support

weaknesses•Inherentcreditriskasamultilateralfinancial

agency lending to countries with relatively low sovereign credit ratings

The outlook is stable. The ratings and stable outlook assume that the bank’s major borrowers will continue to treat ADB as a preferred creditor and that the bank will continue to execute its mission effectively, earning the continued financial support of its shareholders. The ratings could come under pressure if ADB’s preferred creditor status weakens and financial support from shareholders wanes, although S&P views the likelihood of that happening as remote.

Key receNt ratiNg ageNcy coMMeNtary

Fitch

AAA, outlook stable

The ratings of the Asian Development Bank (ADB) are based on the high credit standing of its non-borrowing shareholders, its comfortable capitalisation and its conservative financial policies. The ADB’s capital was shared among 67 member countries at end-2009: regional member countries held 66.6% of capital and non-regional OECD member countries the rest. Only a portion (6.8%) of the capital has been paid in; the rest may be called if needed. Given the high credit standing of shareholders (15 were rated AAA at end-2009), Fitch believes support would be granted if needed. In the medium term, however, shareholders’ support could weaken due to financial difficulties of some non-regional countries. The ADB’s rating outlook is stable. Downward pressure on the rating could arise from a weakening in shareholders’ support, more accommodating risk management policies and a substantial exposure to private-sector operations. Fitch deems those changes unlikely in the short term.

Key receNt ratiNg ageNcy coMMeNtary