EMERGING DEBT
Manila seeks advice on new bond issue
Reuters
First Posted 13:18:00 01/06/2009
Filed Under: Economy and Business and Finance, Emerging Markets Debt, Government Debt, bonds and t-bills
HONG KONG -- Asian bond spreads were little changed Tuesday, with investors focusing on the Philippines, which contacted potential underwriters about a planned sovereign offering in coming months.
Manila has sent invitations to 11 banks including Citigroup, Credit-Suisse and UBS to seek advice on the prospects for a bond issue, National Treasurer Roberto Tan said Monday.
"It's the beginning of the year and the market is anticipating new sovereign issues," said a Hong Kong-based credit analyst. "If confirmed, we might see some selling to make room for new issues."
The Asia iTRAXX investment-grade index excluding Japan, a key measure of risk aversion, was range-bound at 305-325 basis points. The spread has narrowed from a record of just under 650 hit in October.
Plans of US President-elect Barack Obama to cut taxes and raise spending, part of a $775 billion stimulus package, along with expected further interest rate cuts in Asia, have lifted sentiment in recent sessions.
Obama on Monday met with Congress to gain support for the stimulus plan.
The Philippines' five-year credit default swaps (CDS) -- or insurance-like contracts that protect investors against defaults or restructuring -- widened to 360 basis points from 355 on Monday.
The Philippines, one of Asia's largest sovereign debt issuers, hopes to cover much of its $1.5 billion total 2009 overseas borrowing needs in the first quarter, Treasurer Tan said.
Indonesia's five-year CDS also widened by as much as 20 basis points to 650, after the government said it planned to spend more than 72 trillion rupiah ($6.55 billion) on infrastructure and other projects to spur growth.
Jakarta may also raise its 2009 budget deficit to about 1.5 percent of gross domestic product, from a previous forecast of 1.0 percent.
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