ADB implements second issue of bonds in Azerbaijani manats

The Asian Development Bank (ADB) has raised 14.5 million Azerbaijan manat (about $8.5 million) through the issuance of its second bond in this South Caucasus currency, Report informs referring to the bank.

This marks ADB’s fifth gender bond this year issued in a local currency of a developing member country, reflecting ADB’s strategy to attract impact investors to its borrowing program.

The issue is structured as a 3-year currency-linked bond, with a sinking fund to mirror the amortizing terms of an underlying gender loan that seeks to expand access to credit for women and agricultural workers. The bond is denominated in Azerbaijan manat but settled in United States dollars, which makes it easier to crowd-in international investors.

The bond pays a semi-annual coupon of 6.25% per year and is listed on the Luxembourg Stock Exchange. It was arranged by Goldman Sachs International and subscribed by two European institutional investors - Record Currency Management and Capitulum Asset Management

“As our 12th local currency bond issue this year, ADB is also accelerating our program of delivering local currency solutions to both sovereign and private sector borrowers in Asia and the Pacific,” said ADB Treasurer Pierre Van Peteghem. “While these local currency bond issues are small in comparison with our mainstream currency global benchmarks, they are strategically significant and crowd-in portfolio investment to developing countries.”

“We are pleased to partner with ADB on this impactful transaction that will support local currency funding to MSMEs that operate in the food supply chain in Azerbaijan and improve the gender representation in the sector. Affordable local currency funding promotes the development of a healthy and thriving domestic private sector, and the Record EM Sustainable Finance Fund remains committed to providing sustainable currency solutions that deliver inclusive income distribution in local communities,” said Record Currency Management Chief Executive Officer Jan Hendrik Witte. “We congratulate the issuer on their continued effort to support gender equality with sustainable financial initiatives that promote the development of local currency markets.”

"We are proud to be a part of this initiative, which provides us with local exposure in Azerbaijan while supporting important social projects in a very transparent way,” said Capitulum Asset Management Senior Portfolio Manager Theodor Kirschner, who is responsible for the firm’s environmental, social, and governance mandates.

In 2023, to support its local currency operations, ADB has issued gender and green bonds in Georgian lari; gender and health bonds in Mongolian togrog; and gender and green bonds in Kazakhstan tenge as well as un-themed bonds in Azerbaijan manat, Chinese renminbi, Georgian lari, and Kazakhstan tenge.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members - 49 from the region.