Bureau of the Treasury sees it as sign of investor confidence in country’s strong postpandemic recovery
The Philippines has raised 2.1 billion euros (over P122 billion) through the sale of global bonds, its biggest issuance in the euro debt market to date.
It is the country’s first time to offer euro bonds across three tranches, it sold 650 million euros each in four- and 12-year bonds, as well as 800 million euros in 20-year tenor, National Treasurer Rosalia de Leon said.
The 20-year IOUs are so far the longest tenor that the Philippines has sold in the euro market. This means repayment will be stretched over two decades. The amount raised from this 20-year debt paper was also the biggest in individual euro tranche, the Bureau of the Treasury said.
“The new four-year bonds were priced at four-year euro midswaps +75 basis points (bps) and coupon of 0.25 percent, while the new 12-year bonds were priced at 12-year euro midswaps +105 bps and coupon of 1.2 percent. The 20-year bonds were priced at 20-year euro midswaps +135 bps and coupon of 1.75 percent,” the Treasury said. The pricing was set on Wednesday midnight in the Philippines.To be injected into budget“All tranches tightened by 25 bps from the initial price guidance backed by a strong order book which allowed the [Philippines] to revise its price guidance twice across all three tranches,” it added.These new euro-denominated bonds will be settled on April 28.
The Treasury said the money raised from this issuance would largely be injected into the budget.“The success of this euro deal, being already our fourth offering since the pandemic, serves as affirmation that we are on track to emerge from this crisis as a stronger and more resilient economy. Further, the ability to stretch our maturities to the 20-year tenor at tight pricing underscores that investors are indeed taking a long view on our return prospects,” De Leon said.
Dollar bonds issuanceSince last year, the Philippines has ventured into the US dollar-denominated global bond market twice; sold yen-denominated samurai bonds and then this latest euro bond issuance.
“The Philippines’ successful return to the international capital market for the second time this year reflects the investor community’s confidence in the country’s prospects for a strong recovery from the prolonged pandemic … Investors apparently believe we have what it takes to ride out the COVID-19 crisis on the strength of the fiscal discipline that has been maintained and the tax measures plus other reforms that have been carried out by the government,” Finance Secretary Carlos Dominguez III was quoted by the Treasury as saying.