On April 19, 2023, the New Development Bank (NDB) successfully priced a USD 1.25 bln 3-year benchmark green bond under the Bank’s USD 50 bln Euro Medium Term Note Programme. The issuance represents NDB’s return to the international capital markets and is also the first USD Green Bond issued by the Bank, demonstrating its commitment to sustainable capital markets.
The transaction received a strong reception from the investor community. The order book comprised of high-quality investors, with 78% of the final allocation to Central Banks and Official Institutions, and the remaining being taken up primarily by bank treasuries and asset managers. The geographically diverse book had in excess of 50 investors from Asia, Europe and the Americas.
The transaction was launched at an initial price guidance of MS + 140 bps, and received a strong IOI’s. This solid demand allowed the Bank to tighten the spread to MS + 125 bps, 15 bps tighter than initial price thoughts (IPTs).
The net proceeds from the issuance of the bond will be allocated to finance and/or refinance eligible green projects as defined in the NDB’s Sustainable Financing Policy Framework.
Citi, Crédit Agricole CIB, HSBC and ICBC acted as the joint lead managers to the issuance. CACIB also acted as the Green Structuring Advisor.
NDB Vice President and CFO, Mr. Leslie Maasdorp commented, “We are pleased with the strong investor reception and high quality orderbook achieved for our new USD 1.25 bln 3-year Green Bond.With this transaction, NDB has successfully re-tapped into the USD bond market. Our investors have demonstrated their solid confidence in NDB’s credit, and our green and sustainable mandate.The Bank has a robust pipeline of green and sustainable projects in all our member countries to finance. NDB therefore intends to deepen it’s green and ESG credentials with new issuances in the sustainability linked format in the months ahead.”
“Crédit Agricole CIB extends its heartiest congratulations to the New Development Bank in its successful return to the international capital markets, a process which concluded with the issuance of a USD 1.25 bln Inaugural Green benchmark supported by high quality orders, as evidenced by the near 80% allocation to Central Banks and Official Institutions. With participation from over 50 accounts, the trade evidenced a clear appetite for NDB’s credit and a strong support of its ESG mandate by investors. We would like to thank the NDB for placing its trust with CACIB and look forward to many more successful transactions with the team.” – Atul Sodhi, Global Head of Debt Capital Markets, Crédit Agricole CIB.
“Many congratulations to the NDB team for their successful return to the USD market. NDB’s inaugural Green issuance in USD benchmark format was well received with over 50 investors in the USD 1.9 bln orderbook for the USD 1.25 bln deal size. Investors were attracted by the granular project selection and motivated to support NDB’s commitment to sustainable infrastructure and green projects in line with NDB’s Sustainable Financing Policy Framework. Citi is delighted to be part of NDB’s success today.” – Ebba Wexler, Managing Director, Head of SSA DCM, Citi.
“Congratulations to New Development Bank on its highly successful return to the international capital markets and debut USD Green Bond. The deal outperformed in terms of both size and price, with USD 1.25 bln achieved alongside a 15 bps spread compression through the bookbuild. This strength of this outcome and investor distribution is testament to NDB’s extensive efforts in investor marketing and diligence in selecting an optimal issuance window.” – Asif Sherani, EMEA Head of Syndicate and Head of Public Sector DCM at HSBC.
“Congratulations on a truly impressive USD 1.25 bln green bond issuance under a challenging market condition! The burgeoning demand we observed over the past 2-day execution demonstrates universal confidence and sanguine sentiment on SSA bond markets. The very nature of this milestone transaction perfectly depicts the contour of the relationship among all member countries of New Development Bank. We are very proud to accompany the team on this journey!” – Zhi Xu, Head of the Global Capital Financing Department at ICBC (Asia).
Bond Summary Terms
| Issuer | New Development Bank (“NDB”) |
| Issuer Ratings | AA+ (Stable) by S&P / AA (Neg.) by Fitch |
| Format | RegS, Category 2, Green |
| Issue Amount | USD 1,250,000,000.00 |
| Pricing Date | 19 April-2023 (T+5) |
| Payment Date | 26 April-2023 (T+5) |
| Maturity Date | 26 April 2026 (3YR) |
| Coupon | 5.125%, fixed, ANN 30/360 |
| Re-offer Price | 99.791% |
| Re-offer Yield | 5.136% |
| Re-offer vs. SOFR MS (S/A, 30/360) | +125 bps |
| Re-offer vs. UST | CT3 +117.5bps |
| Documentation | Euro Medium Term Note Programme |
| Denominations | USD 200,000 with increments of USD 1,000 thereafter |
| Listing | London Stock Exchange |
| ISIN | XS2598333701 |
| Joint Lead Managers | Citi, Crédit Agricole CIB, HSBC, ICBC |
Background Information
New Development Bank was established with the purpose of mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging market economies and developing countries, complementing the efforts of multilateral and regional financial institutions for global growth and development. In 2021, NDB initiated membership expansion and admitted Bangladesh, Egypt, United Arab Emirates and Uruguay as its new member countries.
In December 2019, NDB registered its inaugural USD 50 bln Euro Medium Term Note Programme (EMTN Programme) in the international capital markets.
