PH raises $2.75B from global bonds offer

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    The Philippine government has raised $2.75 billion, or around P132.17 billion, from its global bonds offering, with proceeds to be used for general purposes including budgetary support, the Department of Finance (DOF) said in a statement yesterday.

    The DOF said the dollar-denominated bonds had a coupon rate of 1.648 for the 10.5-year paper, while the 25-year tranche was priced at 2.65 percent.

    “The success of this issuance is once again a testament of the resilience and resolve shown by the republic to ascend from these tribulations brought about by the pandemic. It also manifests the administration’s ability to identify and capture favorable market windows in such uncertain times,” Rosalia de Leon, national treasurer, said in the statement.

    “Large portion of this success can be attributed to reforms intended to provide the catalysts to accelerate recovery and put the economy back on a strong growth momentum,” she added.

    The transaction is expected to settle on December 10.

    “With only a few weeks left before the end of the year, the republic was able to take advantage of the constructive market backdrop post-US elections and announce the transaction on Wednesday, December 02,” the DOF said.

    “Positive news on the coronavirus disease 2019 (COVID-19) vaccine trials over the past couple of weeks have created strong inflows in Asia-Pacific credit markets, which illustrates the republic’s ability to capitalize on favorable market dynamics,” it added.

    This is the third time that the Philippines returned to the international capital markets this year, with the deal followed by the $2.35 billion dual tranche global bond offering in May, and the 1.2 billion euro dual tranche global bond offering last January.

    “The success of our third offering this year in the international capital markets underpins the international investor community’s recognition of the Philippine economy’s strong fundamentals despite the global economic downturn caused by the COVID-19 pandemic,” Carlos Dominguez, DOF secretary, said in the statement.

    “We believe this result indicated that international investors are aware of, and appreciate, the Duterte administration’s resolve to rebuild the domestic economy and its initial headway in steering it back to its pre-COVID growth trajectory,” he added.

    Credit Suisse, Daiwa Capital Markets, Deutsche Bank, Morgan Stanley, Standard Chartered Bank and UBS were joint bookrunners for the transaction.

    “Despite the ramifications of COVID-19 on financial markets, especially in the Asia-Pacific region, the republic’s successful dual-tranche issuance speaks volumes about the confidence of the market in the fundamentals of the economy, sound credit profile, and its growth trajectory,” Mark Dennis Joven, DOF undersecretary, for his part, said.