PH offers P24.2B Samurai bonds

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    The Philippines has successfully returned to the Japanese bond market with its 55 billion yen offering of the three-year yen-denominated Samurai bond issuance.

    The Bureau of Treasury (BTr) said in a statement yesterday the transaction, equivalent to $500 million or P24.2 billion, marked the first ever zero-coupon bond transaction issued in the Samurai bond market, and followed the Philippines’ successful zero-coupon bond issuance in the euro market last February 2020.

    The BTr said the new three-year Samurai tranche was priced at 21 basis points above the benchmark, the tightest spread the Philippines has achieved so far since its return to the market back in 2018.

    Initial target size was around 30 billion yen but was upsized to 55 billion yen, the BTr said, following strong investor demand allowing the deal to expand new investor base for Philippine issuances.

    Carlos Dominguez, Department of Finance (DOF) secretary, yesterday said it is a good time to borrow offshore “while rates are still relatively low.”

    “The Philippines’ successful return to the Japanese bond market at this precarious time underlines the continued investor confidence in our economy, brought about by its strong fiscal position and prudent management that augurs well for a robust and sustainable recovery from the economic turmoil brought by the coronavirus disease 2019 (COVID-19) pandemic,” Dominguez said.

    “This bond offering brings to light the government’s relentless drive to generate sufficient resources to fund its COVID-19 response and other priority programs that are meant to return the country soon enough to the path of high and inclusive growth,” he added.

    The settlement date of the transaction will be on April 13, 2021, and will mature on April 12, 2024.

    “The issuance shows the republic’s preparedness to expand its funding sources and the continued confidence and support of its credit investor base,” Mark Dennis Joven, DOF undersecretary, said.

    “This landmark transaction highlights the government’s capability to respond to challenging times with creative solutions to free up fiscal space to augment the national government’s COVID-19 response,” Rosalia de Leon, national treasurer, added.

    SMBC Nikko Securities Inc. acted as sole lead manager and book runner for this deal.