The government has successfully returned to the international capital markets for the second time this year, as it raised 2.1 billion euros, or around P122.4 billion, with its multi-tranche global bond offering.
The Department of Finance (DOF) said in a statement yesterday the transaction marks the largest euro transaction and the first triple-tranche euro offering fro1m the Philippines, with tenors of four, 12 and 20 years.
The 20-year bonds also represent the Philippines’ longest ever euro tenor and largest individual euro tranche.
Proceeds of the issuance will be for the Philippines’ general purposes, including budgetary support.
“The Philippines’ successful return to the international capital market for the second time this year reflects the investor community’s confidence in the country’s prospects for a strong recovery from the prolonged pandemic, given that its financial readiness has allowed the government to do whatever COVID-19 response measures are necessary to save lives and revive the economy,” Carlos Dominguez, DOF secretary, said.
“Investors apparently believe we have what it takes to ride out the COVID-19 crisis on the strength of the fiscal discipline that has been maintained and the tax measures plus other reforms that have been carried out by the government since President Duterte assumed office five years ago,” he added.
The new four-year bonds fetched a coupon of 0.25 percent, the 12-year bonds at 1.2 percent, while the 20-year bonds had a coupon rate of 1.75 percent.
Of the total amount raised, 650 million euros was from the four-year bonds, another 650 million euros from the 12-year and the remaining 800 million euros was from the 20-year bonds.
Rosalia de Leon, national treasurer, said the orderbook peaked at 6.5 billion euros.
“The success of this euro deal, being already our fourth offering since the pandemic, serves as affirmation that we are on track to emerge from this crisis as a stronger and more resilient economy,” de Leon said.
“Further, the ability to stretch our maturities to the 20-year tenor at tight pricing underscores that investors are indeed taking a long view on our return prospects,” she added.
The Philippines priced the transaction on April 21 and this is expected to be settled on the 28th.
This issuance follows the 55-billion yen Samurai bond offering earlier in March of this year.
“The euro bond market has proven to be an attractive and sustainable funding source for the Republic on top of our usual peso, dollar and Japanese yen issuances,” Mark Joven, DOF undersecretary, said.
BNP PARIBAS, Credit Suisse, Goldman Sachs, J.P. Morgan, Nomura and Standard Chartered Bank acted as joint lead managers and joint bookrunners for the transaction.
