PHL raises $3B from US-dominated global bonds sale
The treasury bureau launched a US dollar-denominated bond offer with 3 tenors of 5.5 years, 10.5 years, and 25 years with the minimum goal of raising at least $500 million.
The treasury bureau said strong demand helped them lower the interest rates to be paid on all of the bonds. Demand for the bonds also pushed tender offers to reach $28.2 billion.
This is the second global bond offer under the Marcos administration following the US$2 billion triple tranche bond offering in October 2022.
The 25-year sustainable bond offering is the fourth environmental, social and governance (ESG) bond offering and follows those offered in October last year, the JPY70.1 billion four-tranche Samurai-bond in April 2022, and the US$2.25 billion triple-tranche bond offering in March last year.
The rate of the fresh 5.5-year and 10.5-year debt papers were priced at 105 basis points (bps) and 145 bps above similar tenor US Treasuries, with a coupon of 4.625 percent and 5 percent, respectively.
The coupon rates are 50 basis points tighter than the initial price guidance of 155 bps area and 195 bps area, respectively.
In turn, the 25-year Sustainability bond was priced at 5.50 percent at par, 45 bps tighter than initial price guidance of 5.95 percent area.
The government is expected to settle the issuance this Jan. 17.
“The blockbuster reception and tight pricing achieved in all tranches of our latest offering, despite coming on the heels of curtain-raisers done by other big-name sovereigns, reaffirms the distinction of Philippine credit as favored proposition even in times of uncertainties in the market landscape,” National Treasurer Rosalia de Leon said in a statement.
“It is both a reward for our masterful navigation of the pandemic crisis and a motivation to become a beacon for growth in a period of dimming global prospects,” she added.
The maturities are set at July 17, 2028, July 17, 2033, and January 17, 2048, respectively.
The term sheet for the offer shows the proceeds of the bonds will be used for general budget financing. Proceeds from the 25-year sustainability bonds will also be used for the refinancing of assets in line with the Philippines’ sustainable finance framework.
“The robust demand for our first international bond offering in 2023 represents a strong vote of confidence by international investors. It is a testament to the Republic’s sound economic fundamentals and the resilience of our economy in the face of volatile global financial markets,” Finance Secretary Benjamin Diokno said,
In a statement, Diokno said results of the government’s initial bond offering this year “represents a strong vote of confidence by international investors.”
“It is a testament to the Republic’s sound economic fundamentals and the resilience of our economy in the face of volatile global financial markets,” he said.
Diokno said “we are pleased to see international investors’ recognition of the Philippines’ strong economic recovery, sound fiscal policies, and sensible socioeconomic agenda to promote sustainable and inclusive economic growth.”
National Treasurer Rosalia de Leon said “the blockbuster reception and tight pricing achieved in all tranches of our latest offering, despite coming on the heels of curtain-raisers done by other big-name sovereigns, reaffirms the distinction of Philippine credit as favored proposition even in times of uncertainties in the market landscape.”
“It is both a reward for our masterful navigation of the pandemic crisis and a motivation to become a beacon for growth in a period of dimming global prospects,” she added. (Jennifer T. Santos)
