PH global bond sale raises $2B


33% came from Asia, 24% from US, 43% from Europe

The Philippines has completed its 25-year global bond issue, saying it has raised $2 billion as intended at a yield of 3.7 percent, the same coupon rate set a year ago.

“The tight pricing we achieved on the new 25-year bond offering, we believe, underscores the confidence of global investors in the Duterte administration,” Finance Secretary Carlos Dominguez 3rd said.

The Bureau of the Treasury (BTr) said of the $2 billion proceeds, $1.5 billion will be used for the government’s liability management, while the remaining $500 million will be used for general purposes, including budgetary support.

The government has a national budget of P3.35 trillion for this year, 11.6 percent higher than the 2016 budget and is equivalent to 21 percent of the projected gross domestic product for 2017.

The government’s initial yield guidance for the bonds due 2042 was set at 3.95 percent.

The Department of Finance (DOF) said in a statement this “represents the tightest priced long-dated global bond offering ever issued by the Republic on a spread basis, while the yield of 3.70 percent achieved by the Republic on this transaction was on par with the Republic’s 25-year bond offering in 2016 – a remarkable feat considering the higher US interest rate environment currently versus last year.”

“Importantly, this marks the first international capital markets transaction for the new Duterte administration, continuing a strong track record of prudent liability management transactions,” it added.

The order books for the new 25-year global bond offering showed about $4.5 billion.

By geographical allocation, 33 percent came from Asia, 24 percent from the US and 43 percent from Europe.
In a comment, National Treasurer Roberto Tan pointed out that amid the volatility in global markets, the government has managed to garner robust support from the fixed income investor community, a testament to the resilience of the Philippine economy, as well as the strong faith that these investors have in the Duterte administration in executing and implementing reforms and strategies.

“Once again, the liability management exercise has allowed the Republic to achieve significant cost savings that can be channelled towards productive areas that will benefit the country,” he said.

Citigroup, Credit Suisse, Deutsche Bank, Standard Chartered Bank and UBS acted as joint global coordinators, dealer managers and bookrunners for the transaction.

The US dollar-denominated notes have obtained a ‘BBB’ long-term issue rating from Standard & Poor’s (S&P), an expected rating of ‘BBB-(EXP) from Fitch and a (P)Baa2 rating from Moody’s.

In January last year, the Philippines also successfully raised $2 billion from its 25-year US dollar-denominated global bonds as part of the liability management transactions of the government.


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1 Comment

  1. D’yan natin makikita ang tiwala ng mga dayuhang bangkero sa pamumuno ni Pareng Digong: US$2 Billions at par, 25 years, 3.7% yield, at OVERSUBSCRIBED.

    Kapag ituloy ang plano sa “Panda Bonds”, sigurado, oversubscribed din.