The Inter-American Development Bank today priced a US$2 billion global bond issue at 99.585 per cent, with a semiannual coupon set at 5.375 percent and a maturity date of January 18, 2006.
ABN-AMRO and Merrill Lynch are the joint lead managers.
This was the Bank’s first borrowing in the year 2001, and the first to be documented under the Bank’s new Global Debt Program. This program replaces the Bank’s Euro Medium-term Note Program and its domestic U.S. Medium-term Note Program, combining the two documentation platforms into one single program.
Since the year 2000, the Bank has refocused its U.S. dollar bond issuance, concentrating the access to debt markets to fewer and larger transactions. Because investors prefer the improved liquidity offered by the larger bond issues, the Bank’s secondary market spreads have narrowed considerably compared to similar issuers.
Today’s issue is the third bond issue of the Bank in a size of US$2 billion or larger and completes the Bank’s yield curve of highly liquid U.S. dollar benchmark deals. The Bank now offers a yield curve in the U.S. dollar market including a 2003, 2006 and a 2010 maturity.
The proceeds of the issue will be used to help finance the social and economic development of the IDB’s Latin American and Caribbean member countries.
The issue is the first in a funding program that is expected to raise between US$6-8 billion for the full year. Of the 2001 program, most of the needs are denominated in U.S. dollars, with small requirements for euro and Swiss franc funding.