The Asian Development Bank (ADB) attracted a bond denominated in Azerbaijani manat for the first time.

"APA-Economics" informs that the bank informed about this.

According to information, the bond issue amounted to approximately 8.4 million Azerbaijani manats (approximately 4.9 million dollars).

The issue is structured as a currency-linked bond denominated in Azerbaijani manat but settled in US dollars.

The structure allows the ADB to completely reduce the currency risks from its main project, and it opens up access to a wider pool of investors, which is only required to mobilize the dollars to subscribe to the bonds.

The 2.5-year bond attracted a fixed interest rate of 6% and was listed on the Luxembourg Stock Exchange.

The bond was arranged by Goldman Sachs International and fully subscribed by Capitulum Asset Management GmbH.

Proceeds from the bond issue will directly fund ADB's Aurora COVID-19 Essential Food Supply Chain project.

The project provides essential liquidity support for the operation of Europe LLC and the livelihood of its more than 2,600 employees.

The project also supports gender inclusion and contributes to food security through the production and distribution of wheat and dairy products.

"This new bond issue in Azerbaijani manat builds on ADB's strong push in local currency financing among developing countries in Central Asia, with many loans and transactions already completed in Armenian dram, Georgian lari, Kazakhstani tenge and Uzbekistani," ADB Treasurer Pierre Van Peteghem said.

Capitulum Senior Portfolio Manager Theodore Kirchner said: "This deal helps us realize our goal of generating local revenue in Azerbaijan with the continued use of revenue by a transparent supranational issuer."

It was noted that ADB's bond issues in local currency not only attract financial resources in local currency to support loans to borrowers who cannot manage the currency risk associated with loans in dollars or euros, but also contribute to the development of the capital market.