Philippines raises $1.5B from 25-year global bond issue

MANILA, Philippines—The Philippine government has raised $1.5 billion from the issuance of 25-year global bond registered with the US Securities and Exchange Commission, the Department of Finance said Thursday.

Maturing in January 2037, the bonds were priced at par with a yield of 5 percent.

Finance Secretary Cesar V. Purisima said in a statement that the yield was 1.962 percent higher than the benchmark US debt paper.

The latest global bond float carries “the lowest yield for a new 25-year benchmark dollar-denominated offering by the Philippines,” Purisima said.

“We are very pleased to have once again been able to extend the [government’s] maturity profile.”

The Philippines’ most recent foray into the global debt market involved the same amount but with a shorter tenor of 15 years.

Wednesday’s offering is the fourth such sortie of the Aquino administration, which raised P44.1 billion, or $1 billion, through its initial issue of 10-year global peso-denominated bonds in September 2010.

In January 2011, the Treasury also raised about P54.77 billion, or $1.25 billion, through the sale of 25-year global peso bonds.

Officials said book-building for the offering took some 15 hours, with a quarter of allocations going to investors based in the Philippines, another quarter to those in parts of Asia, 35 percent from the United States, and 15 percent from Europe.

“Positive investor reception for this transaction allowed us to achieve our funding objectives in support of our fiscal program,” National Treasurer Roberto B. Tan said.

Deutsche Bank and Standard Chartered Bank were appointed joint global coordinators.

They were also named joint bookrunners along with Citi, Credit Suisse, Goldman Sachs, HSBC, JP Morgan, and UBS.

The amount raised was the upper limit that the government was authorized to raise from the bond float.

With plans to borrow a total of $2.25 billion from commercial lenders, this means that the government has $750 million more to borrow.

The government plans to borrow a total of $4 billion from foreign lenders in 2012, of which $1.75 billion will come in the form of official development assistance from foreign governments and multilateral institutions.