Lenders swarm Philippines’ first global bond issue

The Bureau of the Treasury’s newly launched 25-year global bond issue was swamped by foreign lenders within hours of the announcement on Wednesday, January 4, 2012, according to Daily Inquirer sources.

Foreign lenders flocked to the government’s newly launched 25-year global bond issue on Wednesday, with offers reaching at least four times its target size, according to sources.

The oversubscription came within hours of the announcement by the Bureau of the Treasury that it would raise between $500 million and $1.5 billion in what would be the first sovereign dollar-denominated bond sale for the year.

Tapped to jointly coordinate the bond float were Deutsche Bank and Standard Chartered Bank. They were also mandated as joint bookrunners, along with Citigroup, Credit Suisse, Goldman Sachs, HSBC, J.P. Morgan   and UBS.

“The issue is expected to be launched in the near future subject to market conditions,” the government said in a notice to investors—an indication that the final terms could be sealed as early as Thursday morning as US financial markets close trading hours.

According to sources, the bonds have attracted orders of $9 billion so far, well above the target offer, but the government is not keen to increase the issue size, a source said.

“Book is already at $7.7 billion,” said the source earlier, who is close to the deal but asked not to be quoted while the offer is open.

The source added that the issue size would be in the magnitude of at least $700 million.

The government plans to borrow a total of $4 billion from foreign lenders next year, of which $2.25 billion will be commercial borrowings while the remainder will come from official development assistance.—With a report from Reuters