PH sells $2B in 10-year dollar bonds at 3% yield

The Philippines sold a total of $2 billion in 10-year dollar-denominated bonds at a yield of 3 percent, tighter than the initial price guidance.

In a statement Friday, Finance Secretary Carlos Dominguez III said $750 million was allocated to new money investors while $1.25 billion worth were switched with 14 outstanding US dollar bonds maturing between 2019 and 2037.

The original plan was to issue $1 billion in new money on top of a $1-billion bond swap.

“The new bonds were priced at par with a coupon of 3 percent, tighter than the initial pricing guidance of 3.3 percent and a final spread of 37.8 basis points over US treasuries,” Dominguez said, noting that the country enjoyed investment-grade credit ratings from the three top debt watchers, namely Fitch Ratings, Moody’s Investors Service and Standard & Poor’s.

“The strong support that this 10-year global bond float has received in the international capital markets is a testament to the deepening investor confidence in the country’s newfound status under the Duterte presidency as one of the world’s fastest-growing economies,” according to Dominguez.

“The capital raised from this bond float plus the additional revenue take from the newly implemented TRAIN Law will help bankroll President Duterte’s ‘Build, Build, Build’ program to modernize the country’s infrastructure, sharpen its global competitiveness and sustain rapid—and inclusive—growth as well as financial inclusion for all Filipinos,” Dominguez added, referring to the Tax Reform for Acceleration and Inclusion Act.

The TRAIN since Jan. 1 this year slashed and restructured personal income tax rates that stayed the same for two decades, while also jacking up or slapping new taxes on the consumption of oil, cigarettes, sugary drinks and vehicles. —BEN O. DE VERA