Japanese financial giants: PH samurai bonds to make a killing

Five large Japanese financial institutions are supporting the Philippines’ upcoming $1-billion samurai bond sale, the first issuance without a guarantee.

The Department of Finance (DOF) said in separate meetings in Tokyo this week that Daiwa Securities Group Inc., Mitsubishi UFJ Financial Group (MUFG), Mizuho Bank Ltd., Nomura Holdings Inc. and Sumitomo Mitsui Banking Corp. (SMBC) had told Finance Secretary Carlos G. Dominguez III they expected “strong demand” for the planned issuance of yen-denominated samurai bonds in late July or early August.

“The ninth [samurai] bond issuance set this year with no guarantee fees involved would mean lower financial costs for the Philippine government,” the DOF said in a statement.

The DOF noted that in 2010, the Philippine government’s eighth samurai bond issuance was guaranteed by the Japan Bank for International Cooperation.

The DOF quoted MUFG president and chief executive Saburo Araki as saying there was “strong confidence in the Philippines now and into the future” among Japanese investors and that they were “extremely supportive of the bond issue.”

The firms also cited recent credit rating upgrades and “the strong leadership in the Philippines and the expansion of the Philippine economy.”