ADB Investor Presentation · 10 Indonesia $29,211 mn Papua New Guinea $1,049 mn Fiji $420 mn Nauru...

INVESTOR PRESENTATIONMay 2016

ADB Treasury Departmentwww.adb.org/site/investors/main6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines

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Asian Development Bank

Funding Operations

Green Bond Framework

Appendices

3

An Asia and Pacific region free of poverty

ADB’s Mission

ADB’s Vision

To help our developing member countries reduce poverty and improve quality of life

ADB’s Mode of OperationADB finances projects and programs in the territories of its developing members.

Main instruments comprise loans, equity investments, guarantees, grants, and technical assistance.

ADB also provides policy dialogues and advisory services and mobilizes financial resources through its cofinancing operations.

OUR STRUCTURE• An international development finance

institution• President Takehiko Nakao• Headquartered in Manila, Philippines• Founded in 1966• Owned by 67 members : 48 regional, 19

non-regional• 31 field offices1

• 3,105 employees from 59 countries1

1/ As of 31 December 2015

HOW WE HELPED IN 2015

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Total approved financing2 in

2015:$27.17 billion

2/ Includes Ordinary Capital Resources, Special Funds Resources and Cofinancing Operations

It remains home to half of the world’s extreme poor

451 million in developing Asia live on $1.90 a day

260 million people lack access to improved drinking water supply

1.5 billion people are still without sanitation access

1 out of 24 children dies before reaching age 5

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The Region’s Poverty Challenge

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ADF-OCR MERGERto Boost Support for Region’s Poor ADB’s Board of Governors recently approved a groundbreaking

initiative to combine the lending operations of the bank’s Asian Development Fund (ADF) with its ordinary capital resources (OCR) balance sheet.

The merger will become effective on January 1, 2017.

The merger will boost ADB’s total annual lending and grant approvals to as high as $20 billion— 50% more than the current level. ADB assistance to poor countries will rise by up to 70%.

The merger will further strengthen ADB’s creditworthiness and is perceived favorably by rating agencies:

1. Strengthen ADB’s business profile (franchise value, etc.)

2. Enhance financial profile (almost triple OCR equity base)

3. Provide further diversification of OCR loan portfolio.

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Shareholdings1 Shareholdings1

Non-Borrowing Shareholders Ratings2 2015 Borrowing Shareholders Ratings2 2015

Japan A1/A+ 15.6% People's Republic of China Aa3/AA- 6.5%

United States Aaa/AA+ 15.5% India Baa3/BBB- 6.3%

Australia Aaa/AAA 5.8% Indonesia Baa3/BB+ 5.5%

Canada Aaa/AAA 5.2% Malaysia A3/A- 2.7%

Republic of Korea Aa2/AA- 5.0% Philippines Baa2/BBB 2.4%

Germany Aaa/AAA 4.3% Pakistan B3/B- 2.2%

France Aa2/AA 2.3% Thailand Baa1/BBB+ 1.4%

United Kingdom Aa1/AAA 2.0% Bangladesh Ba3/BB- 1.0%

Italy Baa2/BBB- 1.8% Others 5.4%

New Zealand AAA/AA 1.5%

Others 7.5%

27 Countries 66.7% 40 Countries 33.3%

Totals may not add up because of rounding.

1/ Percent of Total Subscribed Capital as of 31 December.

2/ Moody’s and Standard & Poor’s ratings are as of 22 April 2016. (Source: Bloomberg)

Strong ShareholderSupport

ADB has raised its capital base five times since 1966

Callable capital is available for the protection of ADB’s bondholders

ADB has never made a call on its callable capital

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Growth in ADB’s capital base

Solid Capital Structure

GCI-I1.0

GCI-II3.7

GCI-III11.5

GCI-IV30.2

Pre-GCI-V54.9

GCI-V147.1

0.0

30.0

60.0

90.0

120.0

150.0

180.0

1971 1976 1983 1994 2008 Dec-15

$ bn

Callable Capital Paid-In Capital

$billion

Paid-in capital 7.4

Callable capital 139.7

Subscribed capital 147.1

ADB Capital Structure as of 31 December 2015

TOTAL – $178.4 billion

Cumulative, as of 31 December 2015

TOTAL – $178.4 billion

Cumulative, as of 31 December 2015

Legend:$0 - $500 million $5,001 - $10,000 million$501 - $2,000 million $10,001 - $15,000 million$2,001 - $5,000 million $15,001 million - and above

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Indonesia$29,211 mn

Papua New Guinea$1,049 mn

Fiji$420 mn

Nauru$5 mn

Federated States of Micronesia$9 mn

Marshall Islands$4 mn

Regional$192 mn

Republic of Korea$6,335 mn

People’s Republic of China

$33,600 mn

Thailand$6,545 mn

Malaysia$1,994 mn

Lao People’s Democratic Republic

$214 mn

India$36,842 mn

Sri Lanka$3,035 mn

Pakistan$16,501 mn

Nepal$49 mn

Afghanistan$135 mn

Kazakhstan$4,383 mn

Uzbekistan$4,201 mn

Mongolia$551 mnAzerbaijan

$2,242 mn

Hong Kong, China$102 mn

Singapore$178 mn Philippines

$14,940 mnViet Nam$7,592 mn

Taipei,China$100 mn

Bangladesh$5,455 mn

Cambodia$83 mn

Georgia$1,066 mn

Republic of the Maldives$12 mn

Bhutan $121 mn

Republic of the Union

of Myanmar $349 mn

Cook Islands$41 mn

Armenia$513 mn

Palau$56 mn

Turkmenistan$125 mn

Kyrgyz Republic$20 mn

Timor-Leste $136 mn

Approved Loansby Borrower

Tajikistan$5 mn

1/ Ordinary Capital Resources (OCR) Outstanding Effective Loans include Loans Outstanding at $61.9 billion (gross) and Undisbursed Effective Loans at $25.9 billion. Sovereign at $81.8 billion (93%) and Non-sovereign at $6.0 billion (7%).

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$87.8 billion1 as of 31 December 2015

Outstanding Effective Loans

90.9% Sovereign, 9.1% Non-sovereign as of 31 December 2015

1/ The sum of disbursed and outstanding loan balances, present value of guaranteed obligations and fair values of equities.

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Operation Portfolio1 by Country

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ADB lends primarily to the governments of member countries who afford ADB preferred creditor status.

1/ Includes Loans Outstanding and Undisbursed Effective Loans as of 31 December 2015.

High Asset Quality

ADB has strict policy with regard to non-accrual loans. If loan is overdue by:

• 60 days – no new loans

• 90 days – suspension of disbursements

• 6 months – non-accrual status

Balance Sheet Overview31 December 2015

Net Loans 1$61.9bn

Other 2$32.5bn

Investments $23.3bn

TOTAL = $117.7bn

ASSETS

Borrowings $66.1bn

Other 2$34.2bn

Equity$17.4bn

TOTAL = $117.7bn

LIABILITIES & EQUITY

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1/ Net of allowance for loan losses and inclusive of net unamortized loan origination costs.2/ Mostly derivative assets and liabilities. Net derivative liability is $2.7 billion.

Conservative Financial and Risk Management Policies

CONTENTS

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Funding Operations


Appendices

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Agency Rating

FitchRatings AAA

Moody’s Aaa

Standard & Poor’s AAA

ADB as a Borrower ADB is a leading AAA borrower in

international and domestic capital markets, having issued bonds across various markets in 32 currencies.

Borrowings finance Ordinary Capital Resources (OCR) operations. OCR loans are generally made to developing members that have attained a higher level of economic development.

ADB’s debt securities carry the highest possible investment ratings from major international credit rating agencies.

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AAA Rating based on Strong Fundamentals

“The ratings on Asian Development Bank reflect theunwavering public policy mandate and the preferredcreditor treatment that will continue to support thebank’s extremely strong business profile, and that theinstitution will preserve a very strong financial profile bymaintaining robust liquidity and funding, and strongcapitalization.” – Standard and Poor’s, July 2015

“Robust capital adequacy is underpinned by a healthyoperating environment in the region, as well assustained asset performance supported by its preferredcreditor status. In a recently-approved measure, theADB’s ordinary capital resources will be merged with thelending operations of its concessional financing arm, theAsian Development Fund. Effective 2017, the mergedbalance sheet will triple the ADB’s lending capacity andenhance its capital base, while diversifying lendingoperations and strengthening its business profile –Moody’s, July 2015

“Due to its preferred creditor status, AsDB enjoysextremely low levels of loan impairments. The averagerating of loans is BBB- as of FY-2014, which comparesfavourably to AAA-peers, and reflects the excellentperformance of its loan book (no impairment on itssovereign portfolio). ” – FitchRatings, July 2015

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Selected Bond Issuancesby ADB in Asia and the Pacific

2016 SingaporeHong Kong, ChinaIndia

SGD 100mn bondCNY 130mn bondINR 3bn bond

2005 People’s Republic of ChinaPhilippines Thailand

CNY 1bn bondPHP 2.5bn bondTHB 4bn bond

2015 Georgia GEL 100mn bond 2004 IndiaMalaysiaSingapore

INR 5bn bondMYR 400mn bondSGD 200mn bond

2014 IndiaHong Kong, China

INR 3bn bondCNY 1.0bn bond

1998 Australia AUD 1bn bond

2013 Singapore SGD 500mn bond 1995 Taipei,ChinaRepublic of Korea

NTD 2.6bn bondKRW 80bn bond

2010 Hong Kong, ChinaNew Zealand

CNY1.2bn bondNZD 225mn bond

1970 Japan JPY 6bn bond

2007 Kazakhstan KZT 6bn bond

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OUTSTANDING BORROWINGS1 – $66.1 billion1/ As of 31 December 2015

United States

CanadaNorway

United Kingdom Netherlands

Germany

LuxembourgSwitzerland

Italy

Belgium

Austria

Kuwait

Saudi Arabia

Brazil

People’s Republic of

China

IndiaThailand

Malaysia

Singapore

Philippines

New Zealand

Australia

Japan

Hong Kong, China

Republic of Korea Taipei,China

Kazakhstan

Mexico

South Africa

Turkey

ADB Borrowingsacross Currencies

Euro

Georgia

Borrowing Program: 2005 – 2016

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Amount(actual, $ billion)

4 5 9 9 10 15 14 13 12 14 19 20(indicative)

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1/ ECP dealers include Banc of America Securities Limited, Barclays, Citibank, Goldman Sachs, ING Bank N.V., and UBS.

Ensure availability of funds at all times to meet operational needs

Benchmark issuance Public bond issues

Structured private placements and other reverse

inquiries

Retail targeted transactions

Local currency bond issuance ECP Program1

Funding Availability at all times

Denominated in US Dollar and Euro

In 2, 3, 5, 7 or 10-year maturities

About $1 billion to $3.25 billion in size

Issued at least once a year

Documentation GMTN Programme

Clearing Federal Reserve Book-Entry

System Euroclear and Clearstream

GLOBAL BENCHMARK BONDS

ADB bonds issued in Australia, Canada, New Zealand, Singapore, Switzerland, and UK are repo-eligible

Included in various indices: Barclays Capital Global Aggregate Index Citigroup WBIG JPM Euro Sterling Index Markit iBoxx USD Indices UBS Composite Bond Index – Australia UBS Supra-Sovereign Index

Documentation and Clearing GMTN Programme - Euroclear and

Clearstream; DTC AUD MTN Programme - Austraclear;

Euroclear and Clearstream NZD MTN Programme - Austraclear NZ

System; NZ Clearing System ACN Programme - CDP; HKMA; BNM; PDEx (if

applicable), TDCC; Euroclear and Clearstream MYR MTN Programme – Bank Negara

Malaysia

FUNDINGPLATFORMS

Tailor-fit to meet investor requirements (currency, size, tenor, structure)

Thematic bonds: Water, Clean Energy and Green bonds

Uridashi notes

Retail-targeted bonds

Structured notes

Documentation GMTN Programme ACNP Programme

PRIVATE PLACEMENTS

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FinancingInstruments

0

1

2

3

4

5

6

7

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Apr-16

Ave. maturity in years

$bn

Global $/€ Benchmark Bonds

Public Bond Issues

Local Currency

Other private placements(institutional,Uridashi, retail-targeted)Structured privateplacements

Average maturity(based on first call date)

Borrowings by Type: 2005 – YTD 2016

Note: Excluding Euro-Commercial Paper issuances (ECPs). Year 2016 figures include trades up to 22 April 2016.22

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Apr-16No. of Currencies 7 13 13 7 7 9 9 8 10 11 11 11

No. of Transactions 64 51 94 113 44 92 68 77 58 50 56 25

Diversified Productand Currency Mix

0.702.50

1.001.90

0.303.00

1.002.30

1.000.50

1.000.78

2.502.10

2.001.00

1.253.25

1.001.50

0.651.05

2.251.15

1.002.20

3.001.00

2.251.50

0.501.00

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50

20162016201620172017201720172017201720172018201820182018201820182018201920192019201920192020202020202020202120212022202520252026

US$bn

Year of Maturity

1.750% Global Bonds of 2013

FRN PO of 2013

FRN PO of 2014

1.875% Global Bonds of 2014FRN PO of 2014





FRN PO of 2015


2.125% Global Green Bonds of 2015





FRN PO of 2015

FRN PO of 2016



FRN PO of 2016


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USD Public Offerings outstanding: Over $48 billion

USD Global benchmark bonds issuedYTD 2016: $9.75 billion

0% risk-weighted (Basel II)

Strong sponsorship from underwriters

Robust participation from broad investor base

Selected US$ Public Bond Issuances



2.250% Eurodollar PO of 2010






ADBin the US Dollar Market

Floating Rate Note

Fixed Rate Note


FRN PO of 2016

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BY GEOGRAPHY BY INVESTOR TYPE

Investors Demandfor USD Global Bonds

Note: Includes fixed, floating rate note (FRN) and reopenings on Global format. Percentages may not total 100% because of rounding.

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ADB has maintained a consistent presence in the Kangaroo market since 2006 with at least one issuance per year. As of 22 April 2016, ADB has A$8.8 billion principal outstanding.

Year to date, ADB has issued about A$525 million in Kangaroo bonds.

AMOUNT COUPON MATURITY

A$225 mn 3.00% Oct 2026

A$700 mn 3.75% Mar 2025

A$150 mn 4.50% Sep 2023

A$800 mn 5.00% Mar 2022

A$300 mn 2.80% Jan 2021

A$1.0 bn 6.25% Mar 2020

A$1.2 bn 2.60% Jan 2020

A$200 mn Floating May 2019

A$1.0 bn 3.50% May 2019

A$650 mn 3.50% Jul 2018

A$700 mn 6.00% Feb 2018

A$200 mn Floating Jul 2017

A$1.2 bn 3.50% Jul 2017

A$500 mn 3.00% Nov 20160.500

1.200

0.200

0.700

0.650

1.000

0.200

1.200

1.000

0.300

0.800

0.150

0.700

0.225

0.000 0.500 1.000 1.500

2016

2017

2017

2018

2018

2019

2019

2020

2020

2021

2022

2023

2025

2026

A$bn

Year of Maturity

Floating Rate Note

Fixed Rate Note

ADB in the Kangaroo Market

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BY GEOGRAPHY BY INVESTOR TYPE

Investor Demand for Kangaroo Offerings

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0.150

1.000

0.950

0.300

0.200

0.000 0.200 0.400 0.600 0.800 1.000 1.200

2016

2017

2019

2020

2021

NZ$ bn

Year of Maturity

3.875% NZ$300mn due Jan 2020

4.125% NZ$150mn due Oct 20163.250% NZ$1.0bn due Jul 2017

4.625% NZ$950mn due Mar 2019

As of 22 April 2016, ADB has NZ$2.6 billion principal outstanding across five maturities.

ADBin the Kauri Market

2.875% NZ$200mn due Apr 2021

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0.475

0.250

0.425

0.000 0.100 0.200 0.300 0.400 0.500

Dec 2016

Dec 2017

Dec 2018

£ bn

Year of Maturity

As of 22 April 2016, ADB has £1.15 billion principal outstanding across three maturities.

Amount Coupon Maturity

£425mn 1.00% Dec 2018

£250mn 1.50% Dec 2017

£475mn 1.00% Dec 2016

ADBin the Sterling Market

BY INVESTOR TYPEBY GEOGRAPHY

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In 2005, ADB issued its inaugural RMB 1.0bn onshore RMB bonds (the "Panda Bonds") in China. ADB is the first foreign issuer in the onshore RMB market.

In 2010, ADB successfully launched its first offshore RMB bonds (the "Dimsum Bonds") with a principal amount of RMB 1.2bn with a 10-year maturity, extending the yield curve for the offshore RMB market.

To date, ADB has RMB 3.5bn outstanding bonds, of which RMB 2.5bn are issued offshore.

AMOUNT COUPON MATURITY

RMB1.2 bn 2.85% Oct 2020

RMB1.0 bn 4.20% Dec 2019

RMB1.3 bn 3.20% Nov 2019

ADB in the Onshore/Offshore RMB Market

1.3

1.0

1.2

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4

2019

2019

2020

Year of Maturity Offshore

Onshore

RMB bn

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Private Placements: 2005 – YTD 2016

Responds to investor needs: Quick execution time Flexible issue size Broad maturity range Varied currency and interest rate structure

Note: Includes structured notes, institutional and retail-targeted transactions. Year 2016 figures include trades up to 22 April 2016.

59 issues43 issues

84 issues102 issues

35 issues

72 issues

52 issues

60 issues

36 issues 24 issues30 issues

12 issues

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD 2016

$ bn

Dynamic Participationin Private Placements

28434598120128207286303

444577

9359901,068

1,3511,6541,6931,814

7,549

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

THBGELINRHKDNOKMYRCHFZARMXNSGDCNYTRYJPYBRLCADGBPNZDEURAUD

US$ mn

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Outstanding Non-USD Issuances

1/ As of 31 March 2016.

2/ Excluding Euro-Commercial Paper issuances.

3/ BRL issuances are payable in USD or JPY.

4/ INR issuance is payable in USD.

Multi-currency Issuances

ADB’s thematic bonds highlight its efforts to support key initiatives such as its water programs and clean energy projects through its AAA quality notes.

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ADB launched its first ever topical bonds (Uridashi) in 2010:

Two-tranche Water Bonds (total amount of $638 million equivalent)

Four-tranche Clean Energy Bonds (total amount of $233 million equivalent)

In 2015, ADB has raised an equivalent of about $177 million from its sale of water bonds.

ADB has issued approximately $2.3 billion equivalent in clean energy and water bonds since 2010.

Foray into Thematic Bonds

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Maturity Profile of Outstanding BorrowingsAs of 31 March 2016

Note: Based on notional amounts. Bonds with put and call options were considered maturing on the first put or call date. Includes ECPs.

Redemption Profile

CONTENTS

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Funding Operations


Appendices

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4.2 Billion Population in Asia

1.8 BillionNo. of people w/o

access to clean cooking

615 Million People without access to electricity

Energy Access in Asia and Pacific Region

ADB incorporates the principles of environmental sustainability in its investments across the region.

Background

• Asia’s overall national infrastructure needs are estimated to be around $8 trillion over 2010-2020 or approximately $730 billion per year with key priorities in energy and transport (82%)*

• Sustainable energy and transport solutions are not only good for the environment but are key national security issues for many developing and developed Asian countries

• ADB recognizes the importance of sustainable investments in the region and have been investing over $2 billion in clean energy projects each year since 2011.

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* ADBI 4 Sept 2013.

Overview: ADB’s Project Cycle

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1. Country Partnership

Strategy

ADB Project Cycle

2. Preparation

3. Approval4. Implementation

5. Evaluation

Source: http://www.adb.org/projects/cycle

Green Bond Framework1

1. Project eligibility: ADB’s Green Bond Framework defines eligible projects to support developing member countries seeking to adapt to and mitigate the consequences of climate change

2. Project Selection: The project selection criteria will be implemented by sector specialists in coordination with the treasury department

3. Proceeds: Green bond proceeds will be allocated to a subportfolio and tracked against disbursement of eligible projects

4. Reporting: ADB will make available eligible project list and green bond annual newsletter online

1/ With second opinion.

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Source: http://www.adb.org/sites/default/files/adb-green-bonds-framework.pdf

Highlights

ADB successfully priced a US$500 million Global green bond transaction due 19 March 2025. The bond pays a coupon of 2.125%.

The bond was priced at a spread of +1 bp over Mid Swaps, and +12.45 basis points over the 2.0% US Treasury Notes due February 2025.

On 12 March 2015, ADB successfully priced a US$500 million Global Green bond.

Pricing Details

Overall Distribution by Investor Type Overall Distribution by Geography

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Issuer: ADBRatings: Aaa/AAA/AAA

Format: Global

Size: US$500mn

Pricing Date: 12 Mar 2015

Settlement Date: 19 Mar 2015

Maturity Date: 19 Mar 2025

Coupon: 2.125%

Re-offer: Mid Swaps+1 bp

UST + 12.45 bps

Bookrunners:

Bank of America Merrill Lynch

Morgan StanleySEB AG

ADB US$500 Million 10-year Global Green Bond

Eligible Project Criteria Eligible Projects: selected pool of projects funded, in whole or in

part, by ADB that promotes the transition to low-carbon and climate resilient growth as determined by ADB

√ Mitigation– Renewable Energy

• Solar• Wind• Geothermal• Small Hydro ( 20MW and below)

– Energy Efficiency1

– Sustainable Transport

√ Adaptation– Energy1

– Water and other Urban Infrastructure and Services – Transport

1/ Excludes fossil fuels.

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Eligible Project: Sarulla Geothermal Power Development, Indonesia

PROJECT CATEGORY: Renewable energy

TOTAL LOAN: $250 million

OUTPUTS: Approximately 350MW renewable power

to be commissioned

EXPECTED RESULTS: About 1.3 million tons of CO2 emissions

avoided per year (30 years project life)

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PROJECT CATEGORY: Transport

TOTAL LOAN: $405 million(of which $300 million is OCR)

OUTPUTS: About 100,000 e-trikes operating by 2017 5 solar charging stations of 200 kW each Lithium Ion battery supply chain created

EXPECTED RESULTS: About 332,150 tons of CO2 emissions

reduced per year (10 years project life)

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Eligible Project: Energy-Efficient Electric Vehicles, Philippines


Funding Operations


Appendices43

APPENDIX 1: ADB IN THE NEWS

44

45

ADB in the News

ADB sells $3bn bond in US marketBy: Emma Rumney9 Mar 16

The Asian Development Bank has re‐entered the US dollar bond marketwith the sale of a $3bn, five‐year global benchmark bond.The bank, which aims to raise a total of $20bn from capital markets thisyear, said the proceeds of the bond will become part of its ordinarycapital resources and used in its non‐concessional operations.

“This is another stellar outcome for the ADB against a challengingbackdrop that has prevailed since the beginning of 2016,” said ADBtreasurer Pierre Van Peteghem. “Strong demand for the transactionallowed us to size a $3bn new issue in line with our strategy of providingthe market with liquid benchmark bonds across the curve.”

Van Peteghem added that the bank is pleased by the geographicallydiverse investor participation, with 46% of bonds placed in Asia, 29% inEurope, the Middle East and Africa and 25% in the Americas. He saidthis is “testament to the institution’s robust credit fundamentals andloyal global following in the capital markets”.

The majority (58%) of bonds went to central banks and officialinstitutions, with banks taking a further 29% and the remaining 13%brought by fund managers and other types of investors.

The five‐year bond has a coupon rate of 1.625% payable semi‐annuallyand a maturity date of 16 March 2021.

ADB adds to dual tranche dollar trend as OeKB aims for threes

The Asian Development Bank and Oesterreichische Kontrollbank hit screens withdollar deals on Monday, with ADB adding more supply to a burst of dual tranchetrades the included deals last week by the World Bank and the Japan Bank forInternational Cooperation.

By: Ben Jaglom 18 April 2016

ADB mandated leads Bank of America Merrill Lynchh, BNP Paribas, GoldmanSachs and Mizuho for a dual tranche global deal at two and 10 years. Initial pricethoughts of 8bp area over mid-swaps were circulated for the two year bond and42bp area over swaps for the 10 year.

The decisions to opt for a dual tranche follows last week’s deals by the World Bankand JBIC in dual tranche formats. World Bank printed at two and seven years on12 April while JBIC went for a deal at 5 and 10 years the same day.

“There are a number of reasons why so many issuers are opting for dual tranchedeals,” said a head of SSA syndicate on the deal.

“There is a window of opportunity that issuers are spotting in the market after thedismal start to the year we had and the global decline in equity prices. Doing adual tranche enables issuers to minimize their execution risk while also limiting thenumber of times they have to come to the market.”

A head of SSA syndicate on the deal said that funding conditions were likely to staystrong in April .

“We began April with a great deal of supply and we felt that this would be a greatmoment to get in early while investors remained in key spirits,” he said.

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ADB in the NewsADB Sells $3.25 Billion 3-Year Global Benchmark Bond M2 Communications 01/07/2016 4:41 AM ET

MANILA, PHILIPPINES - The Asian Development Bank (ADB) hasreturned to the US dollar bond market with the pricing of a $3.25billion 3-year global benchmark bond, proceeds of which will be part ofADB's ordinary capital resources and used in its non-concessionaloperations."This is a fantastic outcome and represents ADB's largest-ever globalbenchmark transaction issued to date. We were definitely pleased bythe level of oversubscription in the order book with investor interest inexcess of $4 billion, testament to the institution's robust creditfundamentals and loyal global following in the capital markets," saidADB Treasurer Pierre Van Peteghem.The 3-year bond, with a coupon rate of 1.375% per annum payablesemi-annually and a maturity date of 15 January 2019, was priced at99.655% to yield 23.2 basis points over the 1.250% US Treasury notesdue December 2018.The transaction was lead-managed by Bank of America Merrill Lynch,HSBC, Morgan Stanley, and TD Securities. A syndicate group was alsoformed consisting of BMO Capital Markets, BNP Paribas, Citi, CreditAgricole, Credit Suisse, Daiwa, Deutsche Bank, J.P. Morgan, Mizuho,Nomura, RBC Capital Markets, and Standard Chartered.The issue achieved wide primary market distribution with 35% of thebonds placed in Asia, 34% in Europe, Middle East, and Africa, and 31%in the Americas. By investor type, 68% of the bonds went to centralbanks and official institutions, 20% to banks, and 12% to fundmanagers and other types of investors.ADB plans to raise around $20 billion from the capital markets in2016.ADB, based in Manila, is dedicated to reducing poverty in Asia and thePacific through inclusive economic growth, environmentallysustainable growth, and regional integration. Established in 1966, it isowned by 67 members - 48 from the region.

ADB $2 Billion 5‐Year Global Benchmark IssueM2 Communications 08/20/2015 3:41 AM ET

MANILA, PHILIPPINES - The Asian Development Bank (ADB)returned to the US dollar bond market yesterday with the pricingof a $2 billion 5-year global benchmark bond issue, proceeds ofwhich will be part of ADB's ordinary capital resources and used inits non-concessional operations."We are pleased with the transaction and the consistentsponsorship from investors globally which allowed us to upsizethe transaction to $2 billion," said ADB Treasurer Pierre VanPeteghem.The 5-year bond, with a coupon rate of 1.625% per annumpayable semiannually and a maturity date of 26 August 2020,was priced at 99.461% to yield 16.1 basis points over the1.625% US Treasury notes due July 2020.The transaction was lead-managed by Bank of America MerrillLynch, Goldman Sachs, JP Morgan and RBC. A syndicate groupwas also formed consisting of BNP Paribas, Citi, Credit Suisse,Daiwa, DBS Bank, Deutsche Bank, HSBC, Morgan Stanley,Nomura, and TD Securities.The issue achieved wide primary market distribution with 34% ofthe bonds placed in Asia, 25% in Europe, Middle East and Africaand 41% in the Americas. By investor type, 53% of the bondswent to central banks and official institutions, 38% to banks, and9% to fund managers and other types of investors.ADB plans to raise around $19 billion from the capital markets in2015.ADB, based in Manila, is dedicated to reducing poverty in Asiaand the Pacific through inclusive economic growth,environmentally sustainable growth, and regional integration.Established in 1966, it is owned by 67 members - 48 from theregion. In 2014, ADB assistance totaled $22.9 billion, includingcofinancing of $9.2 billion.

APPENDIX 2: HIGHLIGHTS OF LOAN OPERATIONS

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PROJECT SUMMARY:The program will help Bangladesh continue capital market reformswhich should boost private investment and support the country’sdrive to achieve middle-income status by 2021.The third program will strengthen the Bangladesh Securities andExchange Commission and support the establishment of a clearingand settlement company. It will also support new areas such asstrengthening the Insurance Development and Regulatory Authorityto promote the insurance industry’s growth and stability, andencourage insurers to use the capital markets more.To improve enforcement and to boost accounting and auditingstandards, a special tribunal for capital market-related cases will beput into operation and a financial reporting council with anindependent audit oversight function will be established, resulting inthe adoption of international accounting standards which willenhance market confidence and encourage investment.To increase the supply of high quality bonds and other marketinstruments, policy actions will be taken to remove the 60:40 debt-to-equity ratio ceiling that companies must adhere to, to cut the initialpublic offering lock-in period for private equity investors, and to drawup rules to promote Islamic finance, including sukuk.The program will also spur a more liquid bond market with pilot salesof floating-rate government bonds and by allowing primary dealers toshort sell government securities. Meanwhile, rule changes on taxesand exchange-traded funds will seek to promote a more robustmutual fund industry.

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Third Capital Market Development Program

Development impact:

Enhanced capacity and size of the capital market in a strong legal and regulatory framework

Sector: Finance – Money and capital markets

Drivers of Change: Governance and capacity developmentKnowledge solutions PartnershipsPrivate sector development

Project Term: 2015 – 2018

ADB Financing: $400 million

Bangladesh: Supporting Capital Market Reforms

PROJECT SUMMARY:

Roads are the dominant form of transport in the Jharkhand state, butabout 40% of the main network is in poor condition, hampering mobilityand opportunities between remote areas and industrial and economiccenters. Jharkhand has an estimated 40% of India’s mineral resources,but it is also one of the poorest states, with over a third of its 33 millionpeople living below the state poverty line.

Jharkhand has set out a $2.5 billion investment plan to improve over6,000 km of roads in 2012-2017, and ADB supported the state’s goalswith an initial loan for road improvements in 2009. The new assistancewill continue the ongoing physical upgrades, as well as building up thecapacity of the State Highways Authority of Jharkhand to design, plan,and maintain roads, and adopt a road safety master plan. The state’sroad accident rate is sharply higher than the national average.

A number of safety and environmentally friendly features are includedin the project design, including over 60 bus stop shelters; 50 km ofraised sidewalks in urban areas; 4 km of dedicated bicycle lanes; andsolar-powered street lights. The project will also generate employmentopportunities for residents in five districts, including for women, whowill get a guaranteed share of a least 20% of jobs for afforestation workalongside the upgraded roads.

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Second Jharkhand State Road Project

Development impact:

State roads reconstructed or rehabilitated

Sector: Transport ‐ Road transport (non‐urban) ‐ Transport policies and institutional development

Drivers of Change:

GovernanceCapacity development



India: Improving Road Links

PROJECT SUMMARY:

ADB has approved the assistance for Indonesia’s state electricitycorporation, Perusahaan Listrik Negara (PLN), to carry out majorpower transmission and distribution system upgrades in Sumatra.The assistance will help deliver sufficient and reliable electricitysupply, improving the quality of life and supporting efforts to makethe region a major industrial center.

The funds will finance enhancements to existing 150 kilovolttransmission lines, extension of substations, and the installation ofnew and upgraded equipment, including switchgears. On thedistribution side, work will be carried out to expand and reinforce themedium-voltage and low voltage networks, including the installationof distribution transformers, service connections, and customermeter boxes. The program will also provide capacity building and

institutional strengthening for PLN.

These improvements will help Sumatra achieve an electrification rateof 90% by 2019 and support the overall government target ofachieving universal access to electricity by 2024, from the currentnational rate of around 84%.

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Electricity Grid Strengthening—Sumatra Program

Development impact:

Existing transmission system strengthened and expanded

Sector: Energy – Electricity transmission and distribution

Drivers of Change:

Governance and capacity developmentKnowledge solutionsPartnershipsPrivate sector development



Indonesia: Sustainable Use of Electricity

PROJECT SUMMARY:

Coal has been the predominant fuel for heating in Hohhot, capital ofthe Inner Mongolia Autonomous Region (IMAR) of the People’sRepublic of China (PRC). Adequate heating is a basic human need andessential for socioeconomic activities in IMAR, an area thatexperiences subzero temperatures for typically half of the year, causingindoor and outdoor air pollution and affecting human health. Theproject will reduce respiratory diseases in the local population bydesigning a hybrid district heating system using low-emission naturalgas boilers and zero-emission wind-based boilers, as well aspioneering a new business model for wind-powered district heatingsharing renewable energy subsidies.

After completion, the project will emit 60% less carbon dioxide and82% less nitrous oxide, 98% less sulfur dioxide, and produce negligibleparticulate matter compared to the existing heating system.

About 294,500 households ̶ or 30% of the city’s population ̶ willdirectly benefit, along with 18 schools, 35 kindergartens, and 12hospitals.

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Low‐Carbon District Heating Project in Hohhot in Inner Mongolia Autonomous Region

Development impact:

Improved air quality and reduced greenhouse gas emissions in Hohhot

Sector: Energy

Drivers of Change:

Knowledge solutionsPartnerships



PRC: Reduced Greenhouse Gas Emissions

PROJECT SUMMARY:

The Mahaweli Water Security Investment Program will assist theGovernment of Sri Lanka complete outstanding water conveyanceinvestments under the Mahaweli Development Program.Completion of the program is a key priority of the government andwill maximize the productivity of Mahaweli River Basin waterresources by transferring available water to the northern dry zoneareas of Sri Lanka for irrigation, drinking, and commercialpurposes. This will accelerate local and national economic growth.

Sri Lanka has abundant water resources but with uneven waterdistribution. Local communities have addressed the water stressby constructing many small cascade systems of reservoirs,transfer canals, and irrigation schemes, but these merely providesupplementary irrigation to single paddy crop each year. Thestorage is not even sufficient for drinking water supply.

The outputs of the program will be (i) new and improved waterconveyance and storage infrastructure constructed, (ii) systems forimproving water resource management and developedproductivity, and (iii) operational multidisciplinary investmentprogram management.

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Mahaweli Water Security Investment Program

Development impact:

Improved agricultural production and sustained economic growth

Sector: Agricultural , natural resources and rural development

Drivers of Change:

Governance and capacity developmentKnowledge solutionsPartnerships

Project Term: 2015 ‐ 2024


Sri Lanka: Secured Access to Water Resources

APPENDICES 3 - 9

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Lending Limitation: Under the policy, the total amount of disbursed loans, disbursed equityinvestments, and the related prudential buffer, and the maximum amount that could be demandedfrom ADB under its guarantee portfolio may not exceed the total of ADB’s unimpaired subscribedcapital, reserves, and surplus, exclusive of the special reserve.

Borrowing limitation: ADB’s borrowing policy limits ADB’s gross outstanding borrowings to no morethan the sum of callable capital of non-borrowing members, paid-in capital, and reserves (includingsurplus).

Risk Bearing Capacity: ADB annually assesses its capital adequacy using a stress test methodologythat entails, among other things, estimated non-accrual shocks and their impact on ADB's capital andincome over the next 10 years. The framework provides ADB with the ability to assess its capitaladequacy based on changing portfolio risk profiles as well as on ADB's characteristics as an MDB,including callable capital structure, preferred creditor status, and developmental mandate.

Conservative Investment Guidelines: The maximum allowable average duration of all investmentsoutstanding is 4 years. ADB’s investment guidelines permit only high quality instruments such asgovernment and government-agency debt and highly-rated corporate securities. Further, the Office ofRisk Management monitors the investment portfolio on a daily basis and ensures compliance withprescribed limits.

For further details, please see go to http://www.adb.org/site/investors/credit-fundamentals/financial-and-risk-management-policies

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Appendix 3: Conservative Financial Policies

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Approved on 20 July 2009, the new Safeguard Policy Statement reaffirms and strengthens ADB’scommitment to ensuring that borrowers/clients meet ADB safeguard requirements to avoid,minimize, mitigate and/or compensate adverse impacts of ADB operations on the environmentand project-affected people.

The policy commits ADB to assessing country safeguard systems, assisting borrowers/clients tostrengthen both their approaches and country capacity to manage environmental and socialrisks, and to increasing ADB oversight during implementation.

As a central part of ADB's mission to promote environmentally sustainable and inclusiveeconomic growth, the new Safeguard Policy Statement consolidates and builds upon current ADBpolicies on Environment, Indigenous Peoples and Involuntary Resettlement that are alreadyapplied to all bank-supported projects in developing member countries (DMCs).

The policy ensures that ADB’s safeguards are harmonized with other multilateral developmentbanks and remain relevant to the evolving needs of DMCs and private sector clients.

The policy contains new provisions on biodiversity conservation, community health and safety,and physical cultural resources. Key features include emphasis on capacity development ofborrowers and more attention to safeguard implementation and supervision.

The Safeguard Policy Statement became effective on 20 January 2010.

For further details, please see http://www.adb.org/site/safeguards/main

Appendix 4: Safeguard Policy Statement

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Developing good governance and fighting corruption are core ADB strategic objectives and are crucial to effective,transparent and accountable aid, to which ADB committed by endorsing the Paris Declaration on Aid Effectiveness.

ADB’s Office of Anticorruption and Integrity (OAI), an independent body since October 2009, is the initial point of contactfor allegations of integrity violations involving ADB-related activities or ADB staff. Its mission is to ensure ADB and itspartners maintain the highest ethical and professional standards, and prevent resources intended to improve the lives ofthe poor from being used to line the pockets of the unscrupulous.

Any party found to have committed fraudulent, corrupt, coercive, collusive, obstructive practices, or other integrityviolations identified by ADB risks being sanctioned with debarment. Debarred entities are ineligible to participate inADB-financed, administered or supported activities. A debarred firm’s ineligibility extends to all employees and officersof a firm, and may extend to other principals and contractual employees of the firm. Debarred individuals may notparticipate in ADB-related activity, as individuals or through nomination by an eligible firm, unless they have completelydisassociated themselves with an ineligible firm.

Following the Harmonized Framework adopted by MDBs in 2006, the Agreement on Cross-Debarment was signed byADB, the World Bank Group, the African Development Bank (AfDB), the Inter-American Development Bank (IADB) andthe European Bank for Reconstruction and Development (EBRD) in Luxembourg on 9 April 2010. An important globalmilestone in the fight against corruption, this Agreement allows that an entity debarred by one of the participating MDBsbe subsequently cross-debarred by the other participating MDBs, and constitutes an important step in strengtheningglobal anticorruption efforts.

The base sanction for integrity violations is 3-year debarment. The Integrity Oversight Committee (IOC) may impose agreater or lesser debarment period depending on the circumstances of each case. The IOC will be guided by thefollowing ranges: 1) First debarments (including cases where a party has previously been given a reprimand) – 1 year toindefinite for individuals and 1 to 7 years for firms, 2) Second debarments – up to indefinite for individuals and up to 10years for firms, 3) Subsequent debarments – up to indefinite for individuals and up to 20 years for firms.

In accordance with ADB’s Anticorruption Policy, ADB’s zero tolerance to corruption is linked to broader support forgovernance and improvement in the quality and capacities of developing member countries (DMCs), with fraud andcorruption detection training given to government agencies in several of these DMCs.

ADB also organizes knowledge support activities to improve integrity awareness and skills. Since 2010 it is mandatoryfor all ADB staff to be briefed on the importance of fighting corruption and adherence to ADB’s Anticorruption Policy.

For further details, please see http://www.adb.org/site/integrity/main

Appendix 5: Anticorruption and Integrity Policies

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The Investment Climate Facilitation Fund (ICFF) was established by the Government of Japan (GOJ) and theAsian Development Bank (ADB) in 2008 as a trust fund under the Regional Cooperation and IntegrationFinancing Partnership Facility (RCIFPF) of ADB.

The objective of ICFF is to promote investments in ADB’s developing member countries (DMCs) and facilitateregional cooperation and integration (RCI) through the construction of basic infrastructure, improvements inthe investment climate, capacity building, and promotion of good governance, among others.

Activities to be supported by ICFF are projects that:a. require collective efforts and actions of two or more countries to jointly respond to cross-border issues;b. are national in nature, but with significant regional dimensions and/or implications;c. facilitate regional policy dialogue, including the establishment of regional policies for greater RCI;d. support research and promote knowledge generation and dissemination among DMCs in the area of

RCI;e. strengthen institutional capacity of regional and/or subregional groupings; orf. support regional partnership building with international institutions.

All ADB DMCs are eligible for support from ICFF. Funding priority will be given to projects that promotefinancial sector development and regional investment. Likewise, projects which will promote the visibility ofICFF as well as those which will be implemented in cooperation with Japanese aid agencies will be prioritized.

ADB has been appointed by GOJ as the administrator of ICFF.

Project implementation, supervision, and monitoring are conducted by the concerned departments andoffices following ADB’s standard policies, procedures, and guidelines, including consulting services andprocurement, social and environmental safeguards, financial management and reporting, and anticorruptionand governance, as amended from time to time.

Total funds committed amounted to approximately $31.5 million as of 31 December 2015.

Appendix 6: Investment Climate Facilitation Fund

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Appendix 7: Midterm Review of Strategy 2020 ADB’s Strategic Priorities for 2014 – 2020:

A. Sharpening ADB’s Operational Focus 1. Poverty reduction and inclusive economic growth

2. Environment and climate change

3. Regional cooperation and integration

4. Infrastructure development

B. Responding to the New Business Environment 5. Middle‐income countries

6. Private sector development and operations

7. Knowledge solutions

C. Strengthening ADB’s Capacity and Effectiveness 8. Financial resources and partnerships

9. Delivering value for money in ADB

10.Organizing to meet new challenges

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REGIONAL MEMBERS RatingYear of

MembershipRating

Year of Membership

Afghanistan NR/NR 1966 Micronesia, Fed. States of NR/NR 1990Armenia B1/NR 2005 Mongolia B2/B+ 1991Australia Aaa/AAA 1966 Myanmar NR/NR 1973Azerbaijan Ba1/BB+ 1999 Nauru NR/NR 1991Bangladesh Ba3/BB- 1973 Nepal NR/NR 1966Bhutan NR/NR 1982 New Zealand Aaa/AA 1966Brunei Darussalam NR/NR 2006 Pakistan B3/B- 1966Cambodia B2/NR 1966 Palau NR/NR 2003People's Republic of China Aa3/AA- 1986 Papua New Guinea B1/B+ 1971Cook Islands NR/B+ 1976 Philippines Baa2/BBB 1966Fiji B1/B+ 1970 Samoa NR/NR 1966Georgia Ba3/BB- 2007 Singapore Aaa/AAA 1966Hong Kong, China Aa1/AAA 1969 Solomon Islands NR/NR 1973India Baa3/BBB- 1966 Sri Lanka B1/B+ 1966Indonesia Baa3/BB+ 1966 Taipei,China Aa3/AA- 1966Japan A1/A+ 1966 Tajikistan NR/NR 1998Kazakhstan Baa2/BBB- 1994 Thailand Baa1/BBB+ 1966Kiribati NR/NR 1974 Timor-Leste NR/NR 2002Republic of Korea Aa2/AA- 1966 Tonga NR/NR 1972Kyrgyz Republic NR/NR 1994 Turkmenistan WR/NR 2000Lao People's Democratic Republic NR/NR 1966 Tuvalu NR/NR 1993Malaysia A3/A- 1966 Uzbekistan NR/NR 1995Republic of the Maldives NR/NR 1978 Vanuatu NR/NR 1981Marshall Islands NR/NR 1990 Viet Nam B1/BB- 1966

NON‐REGIONAL MEMBERS

RatingYear of

MembershipAustria Aaa/AA+ 1966Belgium Aa3/AA 1966Canada Aaa/AAA 1966Denmark Aaa/AAA 1966Finland Aaa/AA+ 1966France Aa2/AA 1970Germany Aaa/AAA 1966Ireland Baa1/A+ 2006Italy Baa2/BBB- 1966Luxembourg Aaa/AAA 2003The Netherlands Aaa/AAA 1966Norway Aaa/AAA 1966Portugal Ba1/BB+ 2002Spain Baa2/BBB+ 1986Sweden Aaa/AAA 1966Switzerland Aaa/AAA 1967Turkey Baa3/BB+ 1991United Kingdom Aa1/AAA 1966United States Aaa/AA+ 1966

Note: Moody’s and Standard & Poor’s ratings are as of 22 April 2016. (Source: Bloomberg)

Appendix 8: ADB’s Shareholders –31 December 2015

ADB website www.adb.org

Investor website www.adb.org/site/investors/main

Strategy 2020 www.adb.org/about/policies-and-strategies

Country Operations www.adb.org/countries/main

Annual Reports www.adb.org/documents/series/adb-annual-reports

Funds and Resources www.adb.org/site/funds/main

Sectors and Themes www.adb.org/focus-areas

Data and Research www.adb.org/data/main

Asian Bonds Monitor asianbondsonline.adb.org

News and Events www.adb.org/news

Bloomberg ADB <GO>

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Appendix 9: Sources of Additional Information

Every effort has been made to ensure the accuracy of the data used in this publication. Variations in data in the Asian Development Bank (ADB) publications often result from different publication dates, although differences may also come from source and interpretation of data. ADB accepts no responsibility from any consequence of their use.

This presentation is for informational purposes only and does not constitute an offer to sell or solicitation of an offer to buy any ADB securities in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation.

- The term “country”, as used in the context of ADB, refers to a member of ADB and does not imply any view on the part of ADB as to the member’s sovereignty or independent status.

- In this publication, $ refer to US dollars.

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Disclaimer

Asian Development Bank Treasury Department

Funding Division6 ADB Avenue, Mandaluyong City1550 Metro Manila, Philippines

Email [email protected] Website www.adb.org/site/investors/mainBloomberg ADB <GO>Tel. No. +632 683-1204Fax No. +632 632-4120

Asian Development Bank Fighting Poverty in Asia and the Pacific

All images are from the ADB Photo Library.

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