The New Development Bank backed by the BRICS emerging-market bloc is preparing for its first bond offering next week, likely aiming to diversify its funding sources as well as raise money for loans.
The bank is expected to issue 3 billion yuan ($448 million) in five-year notes in mainland China. It is sounding out investor interest based on a coupon of 2.8% to 3.5%. The terms will be set Monday, with the bonds to be issued Tuesday. Bank of Tokyo-Mitsubishi UFJ will be involved in selling the float to investors as part of the underwriting syndicate.
The proceeds will likely be put toward four approved loans totaling more than $800 million for renewable-energy projects in BRICS countries. The bank is expected to provide funds in the July-September quarter. The BRICS group comprises Brazil, Russia, India, China and South Africa.
The bank, which began operations in July 2015, started off with $50 billion in capital and plans to expand to $100 billion. It intends to focus on infrastructure in emerging countries, similarly to the China-led Asian Infrastructure Investment Bank.