PH eyes to sell at least $1B in euro bonds

The Philippines is looking to sell up to $1 billion worth of euro-denominated bonds across two tenors, while also front-loading all planned offshore bond issuances during the first half ahead of the Tokyo Olympic Games.

Meanwhile, the Bureau of the Treasury on Tuesday 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 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 on an uptick during the past couple of weeks as the market was pricing any possible inflationary impact of Taal Volcano’s eruption last week on top of risks on oil prices, which were nonetheless expected to stabilize.

To date, the debt paper maturing on Feb. 14, 2026, had a total outstanding volume of P147.6 billion.

As for the upcoming euro bond issuance, Sta. Ana said the investor calls last Monday 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. We have a very diverse order book based on initial expressions of interest,” Sta. Ana said.The Treasury can increase the offer beyond $1 billion “if there is ample demand,” Sta. Ana added.

As for the dollar-denominated global bonds, which had been the Philippines’ opening salvo during its yearly offshore bond issuances, Sta. Ana said all clearances, including those from the Bangko Sentral ng Pilipinas and the Office of the President, were already secured such that a “back-to-back” sale with the euro bonds might happen.

The issuance of renminbi-denominated panda bonds as well as yen-denominated samurai bonds could also be scheduled during the first half of the year, especially as the latter 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.

Last year, the Philippines sold both euro and panda bonds in May.

In 2019, 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. INQ