PH eyes sale of at least $1 billion in euro bonds
The Philippines is looking forward to selling up to $1 billion in euro-denominated bonds in two tenors, or maturity periods, while also planning offers of all offshore bonds in the first half of 2020 ahead of the Tokyo Olympic Games.
The Bureau of the Treasury on Tuesday (Jan. 21) sold P27.2 billion in reissued seven-year T-bonds out of its P30-billion offering as it capped the rate at an average of 4.732 percent despite an oversubscribed auction with tenders reaching P52.7 billion.
Deputy Treasurer Erwin D. Sta. Ana told reporters that the auction committee decided to award at a rate where the security was trading in the secondary market, which was 4.7-4.75 percent.
Sta. Ana said interest rates were rising in the past couple of weeks as the market was taking into account any possible inflationary impact of Taal Volcano’s eruption last week on top of risks on oil prices. Oil prices, however, were expected to stabilize.
To date, debt papers maturing on Feb. 14, 2026 had a total outstanding volume of P147.6 billion.
On the upcoming euro bond issuance, Sta. Ana said the investor calls last Monday (Jan. 20) were “successful” such that the Treasury would decide to possibly sell benchmark volumes of at least $500-million each in three- and nine-year IOUs by Tuesday afternoon.
“Updates from banks indicate highly successful initial feedback from investors not only in Europe but also in Asia,” Sta. Ana said.
“We have a very diverse order book based on initial expressions of interest,” Sta. Ana added.
The Treasury can bring the offer beyond $1 billion “if there is ample demand,” Sta. Ana said.
All clearances on dollar-denominated global bonds had been secured, according to Sta. Ana which would make it possible to have a “back-to-back” sale of these bonds with the euro-denominated ones.
The issuance of renminbi-denominated panda bonds as well as yen-denominated samurai bonds could also be scheduled in the first half of 2020.
Samurai bonds may have to be sold before the Japanese market gets busy with the hosting of the 2020 Summer Olympics in Tokyo, Japan on July 24 to Aug. 9.
In 2019, the Philippines sold euro and panda bonds both during the month of May.
In 2018, the Philippines returned to the euro debt market to end the country’s 13-year absence, selling 750 million euros in eight-year bonds at a coupon of 0.875 percent.
