ADB launches US$10 Billion Asian Currency Note Programme
SINGAPORE (14 September 2006) – The Asian Development Bank (ADB)
today launched a US$10 billion Asian Currency Note Programme that will
serve as the first regional platform dedicated to issuances of bonds in
regional currencies.
The programme is Asia's first multi-currency bond platform since
the 1997 Asian financial crisis that links the domestic capital markets
of Singapore and Hong Kong, China, as well as later on Malaysia and Thailand.
Under the scheme, Asian currency bonds are issued in their domestic markets
under a single unified framework with a common set of documents governed
by English law.
DBS is the mandated regional arranger for the programme and sole lead
manager and bookrunner for the Singapore dollar issue. The bookrunners
and sole lead managers for the Hong Kong dollar issue are HSBC, and for
the Thai baht issue Standard Chartered and Bank of Ayudhya.
The inaugural issue under the programme involves the issue by ADB of
S$300 million five-year Singapore dollar notes in Singapore and HK$1 billion
three-year Hong Kong dollar notes in Hong Kong, China to be printed before
the end of the week. ADB also plans to issue THB6.5 billion of 5 and 10-year
Thai Baht bonds shortly once approvals are obtained. While the Thai Baht
notes will not yet be issued under the programme, the Thai Government
has provided its in-principle approval for including Thailand in the programme
in the very near future. Similarly, the Malaysian Government has signaled
its intention to allow ADB to include Malaysia under the programme structure.
"The programme is a significant milestone for Asian capital market
development and for ADB," says ADB Vice-President Khempheng Pholsena.
“It is a logical continuation of ADB's market-opening transactions
in Asian local currency bond markets over the last three years and fully
in line with ADB's support to the ASEAN+3 Bond Market Initiative.”
The scheme was established through the close coordination with and support
of regulators from Hong Kong, China; Malaysia; Singapore; and Thailand.
It allows a leading issuer like ADB to launch a larger bond issue by tapping
several Asian financial markets simultaneously under a single unified
framework. Such a single structure not only provides significant savings
in terms of legal and transaction costs, but also allows issuers to tap
into regional markets as and when market opportunities arise without the
need to seek new approvals for each and every issue.
The programme is structured to accommodate other markets in the region
as and when the terms are approved by regulators. “We hope that
this programme will contribute to creating a unified platform which will
eventually include the entire region. In our view, the programme signals
the potential for Asian capital markets to address Asia's own large
funding needs”, says ADB Treasurer Mikio Kashiwagi.
He notes that the programme will allow regional and global issuers to
simultaneously tap bond markets in the region expeditiously and contribute
significantly to the deepening of bond markets in Asia.
“The format of a linked, multi-location, multi-currency financing
can be applied to other leading issuers, including Asian or multinational
corporate issuers seeking to simultaneously access a large base of investors
across Asia's leading capital markets," says Clifford Lee,
Managing Director of Debt Capital Markets at DBS.
Jackson Tai, Chief Executive Officer of DBS adds that Asia is becoming
the centre- stage for capital formation and is increasingly providing
funds for the rest of the world.
“With the 'ADB format' and the foresight of regulators from Singapore,
Hong Kong, Thailand and Malaysia, underwriters from DBS, HSBC and Standard
Chartered were able to construct a virtual link of Asia's capital markets
to bring scale and investor demand across regulatory borders to serve
a leading issuer," he says. "In the future, leading issuers
will not be limited by the constraints of any one Asian capital market,
whether it be size, currency or investor appetite."
About ADB
ADB, based in Manila, is dedicated to reducing poverty in the Asia and
Pacific region through pro-poor sustainable economic growth, social development,
and good governance. Established in 1966, it is owned by 66 members -
47 from the region. In 2005, it approved loans and grants for projects
totaling $6.95 billion, and technical assistance amounting to $198.8 million.
Visit the ADB website at www.adb.org.
About DBS
Headquartered in Singapore, DBS is one of the largest financial services
groups in Asia with operations in 15 markets. The largest bank in Singapore
and the fifth largest banking group in Hong Kong as measured by assets,
DBS' "AA-" and "Aa2" credit ratings are among
the highest in the Asia-Pacific region. DBS has leading positions in consumer
banking, treasury and markets, asset management, securities brokerage,
equity and debt fund raising. Beyond the anchor markets of Singapore and
Hong Kong, DBS serves corporate, institutional and retail customers through
its operations in China, India, Indonesia, Malaysia, Thailand and The
Philippines. More information about DBS Group Holdings and DBS Bank can
be obtained from the website www.dbs.com.
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