$2.35-B PH global bonds fetch record-low rates

The Philippines’ $2.35 billion in dollar-denominated global bonds fetched record-low coupons for its two tenors, auguring well to raising much-needed funds for the government’s budget, especially for COVID-19 response.

Separately, the Bureau of the Treasury on Tuesday also sold P30 billion in two-year bonds to local investors at 3.052 percent.

Tenders reached P109.5 billion, making the auction more than 3.5 times oversubscribed.

National Treasurer Rosalia V. de Leon said that the Treasury fully awarded the bonds due to “lower rates and appetite now going beyond one year.”

The Treasury opened its tap facility window to sell another P15 billion of the IOUs carved out of five-year debt paper maturing in January 2022.

Last Monday, the Treasury sold P10 billion in 364-day bills to the 11 government securities eligible dealers (GSEDs)-market makers via tap.

As for the $1.35 billion in 25-year and $1 billion in 10-year global bonds—all new money to be settled on May 5—De Leon said in a statement that these “achieved the [Philippine government’s] lowest-ever coupon for a 10- and 25-year benchmark issuance amid no less than an environment gripped with pandemic fear.”

“The new 10-year global bonds were priced at US Treasury spreads of T+180 basis points (bps), after an initial pricing guidance of T+220 bps area, while the 25-year tranche was priced at 2.95 percent, which is 42.5-bps tighter than initial pricing guidance of 3.375-percent area,” she said.

De Leon said that the Philippines capitalized on a short favorable market window amid broader volatility arising from concerns over the COVID-19 crisis.

“This opportunistic transaction was launched following a constructive week in Asia-Pacific credit markets and illustrates the [Philippines’] ability to navigate a challenging global environment and respond efficiently to capture conducive market conditions,” she added.

For Finance Secretary Carlos G. Dominguez III, the strong demand for this bond issue demonstrated the resiliency of investor interest in the Philippine economy despite the global economic fallout from the COVID-19 pandemic. —Ben O. de Vera INQ

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