AIIB prices US$2.5 billion debut global bond

The global bond offering by the Asian Infrastructure Investment Bank has attained a triple AAA rating, and the proceeds will be used to enhance worldwide sustainable development

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The Asian Infrastructure Investment Bank (AIIB) has sold its first global bond. The US$2.5 billion offering of five-year bonds was priced on May 9, and will help drive AIIB’s priorities of investing in sustainable infrastructure, developing cross-border connectivity, and promoting environmental, social and governance (ESG) investing in emerging Asian economies.

Thierry de Longuemar, AIIB’s chief financial officer, hailed the pricing of the bond as a landmark transaction for the market.

“This bond is reflective of investor demand globally for high-quality sustainable investments,” he says. “AIIB’s outlook has always been global, with founding members from Asia, Africa, South America and Europe.  We were delighted to see demand from such a diversified group of investors in the book and look forward to showing our global investor base the positive contribution that this capital will have in Asia and beyond.”

The inaugural bond has Triple A ratings from Standard & Poor’s, Moody’s and Fitch. AIIB has a Bank of International Settlements zero percent risk weighting, and its addition to the European Banking Authority’s Capital Requirements Regulation (CRR) list of multilateral development banks was recently approved by the European Parliament.

The bank has to date approved financing worth around US$8 billion. “By participating in capital markets, we can harness further financial support from a global investor base, which will enable us to catalyze infrastructure investment and accelerate adoption of ESG Investing Principles in Emerging Asia,” comments AIIB President Jin Liqun.

AIIB funds will focus on, among other things, high-impact investments that promote sustainable development and climate resilient infrastructure. Examples of projects that AIIB finances include metro lines in India, clean water projects in Egypt and Indonesia and bringing electricity to rural residents in Bangladesh.

Bookrunners on the bond offering were Bank of China, Credit Agricole CIB, Goldman Sachs International, and TD Securities. 

“During the preparation of this inaugural bond, AIIB made sure that ESG rating agencies would have the opportunity to understand AIIB’s goal to finance sustainable infrastructure and recognize that it did set up the right governance and organization to reach these goals, including by enshrining these objectives in the bonds Use of Proceeds,” says Tanguy Claquin, managing director, global head of sustainable banking at CA CIB.

Claquin adds, “This proactive approach on ESG rating agencies has been extremely well received by specialized investors. For such an iconic inaugural trade, it demonstrates the high commitment of AIIB’s management to sustainability and the ever-growing importance of corporate responsibility in Asia.”

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Date

14 May 2019

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