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ADB Issues $169 Million Long Dated Rupee-Linked Bond

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The Asian Development Bank (ADB) has raised 11 billion Indian rupees (Rs), about $169 million, from a new issue of offshore Indian rupee-linked bonds.

The transaction was structured as a tap issue into ADB’s 10-year bond originally issued in October 2016, raising the outstanding amount to Rs20 billion or $308 million—the largest local currency bond issued to date by ADB for on-lending purposes in the same currency.  

“ADB’s commitment to regular bond issuance in the offshore Indian rupee market has galvanized demand from high caliber investors across all regions,” said ADB Treasurer Pierre Van Peteghem. “Traction with investors allows ADB to raise larger amounts for longer maturities at attractive pricing and acts as a catalyst for the institution’s local currency lending.”

The new issue taps into ADB’s longest outstanding offshore Indian rupee bond, bearing a semi-annual coupon of 6.20% and priced to yield 6.00%.

The bonds, which are denominated in Indian rupees but settled in US dollars, were underwritten by Citibank and TD Securities. Mandated at Rs5 billion, the order book was heavily oversubscribed with the final issue size increased to Rs11 billion. Some 81% of the bonds were placed in Asia and 19% in Americas. By investor type, 100% of the bonds were placed with official institutions and fund managers.

Proceeds from the bonds will be mobilized to support ADB lending in India. India is ADB’s fourth largest shareholder and is its largest borrower. In 2016, ADB approved $795 million in private sector projects in India, its largest market.

ADB is a regular borrower in the mainstream international bond markets but has also led issuance in developing Asian countries as part of efforts to promote domestic bond markets as an alternative to bank lending. ADB has raised more than $25 billion from the capital markets in 2017.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in cofinancing.

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World Bank Supports Maldives in its Journey Towards Resilience and Prosperity

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Minister of Finance for Maldives, Hon. Ibrahim Ameer and the World Bank Country Director for Maldives, Nepal and Sri Lanka, Dr. Idah Pswarayi-Riddihough. Photo: Richa Bhattarai/World Bank

The World Bank is providing support to the Government of Maldives to strengthen the country’s sustainability of public finances while minimizing impacts of natural hazards. Two complementary agreements – one to enhance budget credibility and reduce fiscal pressures, and the other to help the government support reforms for increased resilience and take immediate action during an emergency – were signed to that effect. 

The first agreement, a $20 million Development Policy Financing (DPF), will focus on improving the policy framework for enhancing sustainability of public finances and strengthening the policy framework to increase budget credibility. The second agreement is a $10 million Catastrophe Deferred Drawdown Option, (Cat DDO), with an associated Pandemic Emergency Financing Facility (PEF). The Cat DDO will help enhance the Maldives’ financial capacity to effectively manage the human, physical and fiscal impact of climate change, natural disasters and diseases.

The suite of instruments are quick disbursing sources of financing that will support the government to take immediate response, relief and recovery activities following a disaster or an emergency, including health.

The agreements were signed today at the Ministry of Finance by Minister of Finance, Hon. Ibrahim Ameer and the World Bank Country Director for Maldives, Nepal and Sri Lanka, Dr. Idah Pswarayi-Riddihough.

“The agreements are part of integrated risk management options to improve the country’s resilience to shocks and safeguard macroeconomic sustainability,” stated Idah Pswarayi-Riddihough, World Bank Country Director for Maldives, Nepal and Sri Lanka. “In addition, it is for the first time that a country in South Asia has prepared a Cat DDO that is linked with this new pandemic emergency financing. This is a kind of insurance for the future.”

Maldives has made considerable progress in its macroeconomic and human capital indicators. However, due to its unique geographical placement, vulnerability remains high, and Maldives can increase its resilience by strengthening its fiscal management and preparedness for shocks. The country also continues to be vulnerable to natural hazards and extreme climatic events with considerable economic consequences.

The co-task team leaders of the projects, Fernando Im and Armando Guzman, commended the Maldivian government on their vision, and commitment in achieving a remarkable and innovative milestone. This is particularly important given that Maldives is a small island state. 

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UNIDO and Kenya to increase cooperation for inclusive and sustainable industrial development

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LI Yong, the Director General of the United Nations Industrial Development Organization (UNIDO), arrived for a two day official visit to Kenya where he will meet numerous high-level government and private sector representatives, including H. E. President Uhuru Kenyatta, one of the Africa Heads of State and Government who are also Champions for the Third Industrial Development Decade for Africa (IDDA III).

During his official visit, LI Yong will also meet with the Cabinet Secretary of the Ministry of Industry, Trade and Cooperatives, the Cabinet Secretary of the Ministry of Energy and the Cabinet Secretary of the Ministry of Foreign Affairs, with whom he will have the opportunity to discuss stronger collaboration, including through UNIDO’s Programme for Country Partnership (PCP), the Organization’s innovative model for accelerating inclusive and sustainable industrial development.

Further, the UNIDO Director General will meet key private sector representatives, including from the Kenya Association of Manufacturers and will pay a visit to the Kenya Industrial Research and Development Institute (KIRDI). The two day visit will allow LI Yong to also meet with donors and development partners, including the UN Resident Coordinator and the United Nations Country Team (UNCT) as well as, inter alia, the Head of Development Cooperation and Acting Ambassador of the EU delegation to Kenya and the Ambassador of Italy to Kenya.

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UN Security Council discusses Kashmir- China urges India and Pakistan to ease tensions

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Women walking past Indian security forces in Srinagar, summer capital of the Indian state of Jammu and Kashmir. Nimisha Jaiswal/IRIN

The Security Council considered the volatile situation surrounding Kashmir on Friday, addressing the issue in a meeting focused solely on the dispute, within the UN body dedicated to resolving matters of international peace and security, for the first time since 1965. 

Although the meeting took place behind closed doors in New York, the Chinese Ambassador, Zhang Jun, spoke to reporters outside the chamber following deliberations, urging both India and Pakistan to “refrain from taking any unilateral action which might further aggravate” what was an already “tense and very dangerous” situation. 

The Indian-administered part of the majority-Muslim region, known as Jammu and Kashmir had its special status within the constitution revoked by the Indian Government on 5 August, placing it under tighter central control. Pakistan has argued that the move violates international law. 

The UN has long maintained an institutional presence in the contested area, which both countries claim in its entirety, with the areas under separate administration, divided by a so-called Line of Control. The UN Military Observer Group in Indian and Pakistan (UNMOGIP) observes and reports on any ceasefire violations.  

In a statement issued on 8 August, UN Secretary-General António Guterres said he had been following the situation in Jammu and Kashmir “with concern”, making an appeal for “maximum restraint”.  

“The position of the United Nations on this region is governed by the Charter…and applicable Security Council resolutions”, said the statement. “The Secretary-General also recalls the 1972 Agreement on bilateral relations between India and Pakistan also known as the Simla Agreement, which states that the final status of Jammu and Kashmir is to be settled by peaceful means”, in accordance with the UN Charter

Ambassador Zhang said Council members had “expressed their serious concern” concerning the current situation in Jammu and Kashmir…The Kashmir issue should be resolved properly through peaceful means, in accordance with the UN Charter, the relevant Security Council resolutions and bilateral agreements.” 

Pakistan requested the Security Council meeting on 13 August, and it was subsequently called for by Permament Member, China.  

Speaking to reporters outside the chamber, Pakistan’s Ambassador, Maleeha Lodhi said the meeting had allowed “the voice of the people of the occupied Kashmir” to be heard “in the highest diplomatic forum of the world.” She argued that “the fact that this meeting took place, is testimony to the fact that this is an international dispute.” 

She said that “as far as my country is concerned, we stand ready for a peaceful settlement of the state of Jammu and Kashmir. I think today’s meeting nullifies India’s claim that Jammu and Kashmir is an internal matter for India. Today the whole world is discussing the occupied state and the situation there.” 

Speaking a few minutes later, India’s Ambassador, Syed Akbaruddin, said that “our national position was, and remains, that matters related to Article 370 of the Indian Constitution, are entirely an internal matter of India…The recent decisions taken by the Government of India and our legislative bodies are intended to ensure that good governance is promoted, socio-economic development is enhanced for our people in Jammu and Kashmir and Ladakh.” 

He said that the Chief Secretary of Jammu and Kashmir had announced measures which would return the region towards a state of “normalcy” 

“India remains committed to ensure that the situation there remains calm and peaceful. We are committed to all the agreements that we have signed on this issue.” 

But without naming names, he stated that “of particular concern is that one state is using terminology of jihad against and promoting violence in India, including by their leaders”, adding that India was committed to the principle “that all issues between India and Pakistan, as well as India and any other country, will be resolved bilaterally, peacefully, and in a manner that behooves normal inter-state relations between countries.” 

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