PH eyes bigger panda bond sale in Q2

The government plans to sell a bigger volume and possibly multiple tenors of renminbi-denominated panda bonds in China by the second quarter, National Treasurer Rosalia V. de Leon said Monday.

The Philippines’ second foray into the panda market will also tap the bond direct facility, which de Leon said will allow offshore investors to invest in the onshore renminbi market.

The country would be the first in the region to tap the bond direct facility, De Leon told reporters in an interview after the treasury bills auction.

“When we did the first panda issue, we are just looking at the onshore Chinese investors,” she explained. “But they opened up the bond direct facility of the panda, so that also allowed offshore investors to invest in the onshore market. So just the same, we see there would also be a lot of interest from offshore investors to invest in the onshore renminbi market.”

According to de Leon, the government is eyeing to sell panda bonds worth $300 million to $ 500 million, or more than the $230-million worth issued in 2018.

In March last year, 1.46 billion renminbi — about P12 billion — in three-year panda bonds were sold by the Philippine government for the first time in China at a yield of 5 percent.

This year the government may issue the panda bonds in tenors of three, five, and seven years.

“If the volume is bigger, we might consider a multi-tranche [issuance],” de Leon said.

A non-deal roadshow will be conducted in Beijing alongside a Philippine Economic Briefing ahead of the planned return to the panda market, she added.

As for the samurai bond issuance in the pipeline, de Leon said the non-deal roadshow will be held in Osaka, Japan on Feb. 22 besides a Philippine Economic Briefing to be led by the economic team.

De Leon said they were looking into issuing the yen equivalent of $1-1.5 billion in samurai bonds with the same tenors of three, five and 10 years.

Last August, the Philippines also sold 154.2-billion yen — P74 billion — in samurai bonds across three tenors, ending the country’s eight-year absence in the Japanese debt market.

De Leon said the next samurai bond issuance would likely be a year after last year’s sale.

Meanwhile, the Treasury also sold all the P20 billion in treasury bills it offered Monday as rates fell across the board.

The Treasury awarded P6 billion in the benchmark 91-day debt paper at 5.484 percent; P6 billion in 182-day at 5.867 percent; and P8 billion in 364-day at 5.924 percent.

Total tenders across the three tenors reached P33.7 billion, making the auction over 1.5 times oversubscribed. /atm