PH offers 25-yr global bonds for $2B

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The Philippines on Wednesday announced the launch of its global bond sale to raise as much as $2 billion to finance the government’s P3.35 trillion national budget this year.

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In a notice, the Bureau of the Treasury (BTr) said it is offering new 25-year dollar bonds due 2042 “to finance President Rodrigo Duterte’s P3.35 trillion pesos budget and repay foreign debts.”

The initial yield guidance for the bonds is 3.95 percent, with the bond issue marketed alongside a one-day tender offer for some of its outstanding dollar bonds.

The bond sale started at about 8 p.m. New York City time on Jan. 17 (or 9 a.m. Manila time Jan. 18), and will expire at 2 p.m. New York City time on Jan. 18 (3 a.m. Manila time Jan. 19).

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.

Moody’s said it expects to remove the provisional status of the rating upon the closing of the proposed issuance, and a review of the final terms.

“The Philippines’ Baa2 government bond rating incorporates sound economic and fiscal fundamentals,” Moody’s added.

The government has hired Citigroup, Credit Suisse, Deutsche Bank, Standard Chartered and UBS to serve as joint global coordinators and bookrunners for the new bond offering.

In January last year, the Philippines 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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