The Philippines successfully returned to the international capital markets for the third time this year, its first under the Marcos administration, as it raised $2 billion from its US dollar-denominated bond offering.
The triple-tenor transaction follows the Philippines’ 70.1-billion yen four-tranche Samurai bond offering in April 2022 and the $2.25- billion three-tranche bond offering in March 2022.
According to a statement released by the Bureau of the Treasury yesterday, despite the ongoing weakness in global credit markets amid high inflation and rising US interest rates, the Philippines was able to navigate volatile market conditions and successfully price the global bonds.
The BTr said that the offering attracted interest from a diverse pool of international investors, showcasing strong investor appetite globally.
“The strong demand for our first international bond offering under President Marcos’ administration demonstrates investor confidence in the new government and the administration’s six-year plan of economic transformation to a more inclusive, resilient and prosperous economy,” Benjamin Diokno, finance secretary, said in the statement.
The new 5- and 10.5-year tranches were priced at US Treasury plus 120 and 185 basis points (bps) with a coupon of 5.17 percent and 5.609 percent respectively, 35 bps tighter than an initial pricing guidance of US Treasury plus 155 and 220 bps area, respectively.
The 25-year Sustainability tranche was priced at 6.1 percent with a coupon of 5.95 percent, 45 bps tighter than initial pricing guidance of 6.55 percent area.
The government intends to use the proceeds from the sale of the 5- and 10.5-year global bonds for general purposes, including budgetary support.
Meanwhile, the proceeds from the 25-year global bonds will be applied to finance or refinance assets under the Republic’s Sustainable Finance Framework. Standard Chartered Bank and UBS acted as Joint Sustainability Structuring Banks.
“The success of this transaction is an indication of the Philippines’ readiness to brave choppy waters in pursuit of excellent results,” Rosalia de Leon, national treasurer, said.
BofA Securities, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley, SMBC Nikko, Standard Chartered Bank and UBS acted as Joint Bookrunners for the transaction. Angela Celis
