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BRICS’ New Development Bank issued $2.25 bln bonds on international capital markets

The agreement on establishing the BRICS New Development Bank was reached on July 15, 2014, in Brazil’s Fortaleza

SHANGHAI, July 19. /TASS/. The New Development Bank (NBR) of BRICS countries announced the issue of three-year bonds worth $2.25 bln on the international capital markets, the bank’s press service reported on Monday. The goal of the offering is to raise funds as part of the program for fighting COVID-19.

This is the fourth and largest transaction for the bank to place dollar bonds on the international capital markets. The funds that are raised after the placement of these bonds will be used to finance sustainable development projects, as well as to issue loans as part of the BRICS emergency assistance program to fight against COVID-19.

The NDB established a corresponding support program in the amount of $10 billion in April 2020. Of this amount, $5 bln should go to support health care and social stability, while the remaining $5 bln will finance economic recovery efforts by the BRICS countries.

To date, the NDB Board of Directors has approved loans for $9 bln under this program.

"The NDB is leveraging its access to international investors to fund COVID-19 emergency response loans as well as ordinary operations," Leslie Maasdorp, Vice-President and Chief Financial Officer of the NDB, said as quoted by the press service. According to him, in 2020, the bank made four public bond issues, including its first America dollar-denominated bonds.

"In 2021, we plan to raise approximately $7 bln equivalent across different currencies in international and domestic capital markets, with a strong emphasis on ESG," Maasdorp said.

BRICS is an informal assembly of nations. The acronym of BRICS is derived from the first letters in the names of its member states (Brazil, Russia, India, China, and South Africa). South Africa joined the bloc in 2011 when it was called BRIC. The bloc aims to develop comprehensive cooperation between its members.

The agreement on establishing the BRICS New Development Bank was reached on July 15, 2014, in Brazil’s Fortaleza. The bank’s starting capital was set at $100 bln. The Shanghai-headquartered bank has been set up to finance infrastructure projects and projects for the sustainable development of BRICS and other developing countries. The bank previously received international credit ratings of "AA +" from Fitch Ratings and S&P Global Ratings, which allow it to effectively attract long-term funding in international and local capital markets.