Gov’t selling dollar bonds to locals

The Bureau of the Treasury will auction on November 28 to domestic investors some $500 million worth of 10.5-year bonds.

In a notice to dealers of government securities, newly appointed National Treasurer Rosalia de Leon said each bond would be worth $10,000 and would be sold at face value. The government will accept a minimum bid of $1 million and bids should be in increments of the same amount.

De Leon said the bonds would mature on June 4, 2023. However, she said that if the bonds would not be issued as planned, the maturity date would fall 10 and a half years after the date of a successful issuance.

De Leon said the bonds could be sold to individuals, foreign currency depositary units (FCDUs), corporations, tax-exempt institutions and trusts as well as government-owned and -controlled corporations (GOCCs) and local government units (LGUs).

She said GOCCs and LGUs could buy the bonds only through the Treasury’s over-the-counter facility, unless otherwise authorized by the national government.

Last September when de Leon was still head of the Department of Finance’s international finance group, she said the issuance of dollar bonds in the local capital market was meant to raise funds to settle maturing obligations denominated in the greenback.

This will follow last week’s issuance of $750 million (P30.8 billion) worth of peso-denominated bonds to global investors as well as a standing offer to buy back outstanding dollar bonds. The government is inviting bondholders to exchange their securities for new issues. The invitation is good until the close of business hours in New York on November 15.

Out of $15.7 billion worth of outstanding Philippine government bonds that are eligible for buyback, the government wants to retire up to $1.5 billion.