Gov’t set to hold $3B twin bond offering

SINGAPORE—The Philippines is preparing a twin offer of Global peso and dollar bonds totaling $3 billion, the proceeds of which will be used to retire up to $2.5 billion of outstanding bonds as part of the government’s debt management program.

A portion of the total proceeds will cover the government’s remaining $500-million external financing requirement this year, a source from the Bangko Sentral ng Pilipinas told Reuters.

The central bank’s policy-making Monetary Board has already approved the sale of up to $1.5 billion in 15-year Global peso bonds, and as much as $1.5 billion in a new 25-year dollar bond or a reopening of a $1 billion due in October 2034, according to a source who has seen documents on the bond sale.

Citigroup, JP Morgan, Goldman Sachs, HSBC, Standard Chartered and UBS have been short-listed for the mandate, which is expected to be awarded soon.

Deutsche, HSBC and UBS were the leads on the bonds due 2034. At the time, those bonds were priced at 99.382 with a 6.375-percent coupon for a 6.425-percent yield, or 216.5 basis points over Treasuries.

The bonds are trading in secondary markets at a cash price of 118-119 or a yield of around 5 percent.

The RoP, one of Asia’s most active sovereign issuers of foreign debt, would likely proceed with the planned debt sales as early as September, when investors return from their holidays.

The Monetary Board’s decision was an approval in principle of an urgent request from the government, the source said, with the plan to go through a final approval process later.—Reuters