Gov’t raises $1.5B from bond issue

MANILA, Philippines—The government raised $1.5 billion from the issuance of 15-year, US Securities and Exchange Commissioned-registered global bonds, the Department of Finance announced Tuesday.

Maturing in March 2026, the newly issued bonds were priced at 99.495 percent with a coupon of 5.5 percent and a yield of 5.55 percent.

“We are very pleased with the response to the transaction, with strong investor interest enabling the [Philippines] to successfully establish a new 15-year benchmark on its US dollar yield curve,” National Treasurer Roberto B. Tan said in a statement.

“The deal was significantly oversubscribed” from 280 prospective investors, [showing] the confidence of the international investor community in the economic and financial prospects of the Philippines,” Tan said.

Finance Secretary Cesar V. Purisima said the Philippines moved swiftly to access the US dollar bond market and achieved low-cost, long-dated offshore funding.

“This continues [Malacañang’s] pro-active stance in managing its sovereign debt, extending its debt maturity profile during uncertain times for the global economy,” Purisima added.

The officials said the book-building process for the offering took only 10 hours, with 22 percent of allocations going to investors based in the Philippines, 18 percent to those from the rest of Asia, and 30 percent each from the United States and Europe.

HSBC and Goldman Sachs were the joint global coordinators while UBS, JP Morgan, Citigroup and Deutsche Bank were the joint bookrunners.

The amount raised was the upper limit of the government’s target, based on Tan’s statements on Monday.

Back then, Tan said the issue might reach $1.5 billion partly due to expected delays in disbursements of official development assistance.

He said such delay was due to ongoing discussions about the loans and that this was not due to the calamity in Japan.

Tuesday’s issuance was the government’s second foray in the global bond market this year, having raised about P54.77 billion, or $1.25 billion, through the sale of 25-year global peso bonds last January.

It was also the third sortie for the Aquino administration, which also raised P44.1 billion, or $1 billion, through the float of 10-year global peso bonds in September 2010.