THE Bureau of the Treasury (BTr) has reported that the Philippine government has launched its samurai bonds bearing four tenor buckets on Tuesday, eyeing to raise at least $750 million from the issuance.
National Treasurer Rosalia V. de Leon told reporters the Philippines has gone back to the yen-denominated market on Tuesday as it markets its samurai bond issuance to Japanese investors.
“We are already in the market, given also the initial price guidance for the three-, five-, seven-, and 10-year [tenors], so the official marketing starts today,” de Leon said.
She said the expected earnings from the issuance can go up to a maximum of $1 billion depending on the results of the marketing efforts of the BTr.
“We still have to see in terms of the whole results of the first day marketing. We still have to discuss that [until when we will market] with the underwriters,” de Leon added. But, obviously, maybe within the week we would already [identify a] price. Hopefully, within the week, depending on the results [of our discussion].”
De Leon explained that issuing bonds in the different debt markets is in line with the government’s plan to diversify its financing sources.
“[The issuance should be before] August 8. Actually that’s really the target since we have to avoid what we call [the] ‘Obon,’” she said.
The Obon is a Japanese Buddhist custom to honor the spirits of one’s ancestors, which begins August 13 and lasts until August 15.
In August last year, the Philippine government returned to the yen-denominated samurai bond market after an eight-year hiatus, with a multitranche ¥154.2-billion transaction, or $1.39 billion, which yielded a weighted average spread of 34.7 basis points above benchmark.
The three-year tranche was priced 25 basis points above the benchmark, the five-year tranche at 35 basis points and the 10-year tranche at 60 basis points.
The banks that acted as joint lead managers and book runners for the Samurai bond issuance were Daiwa Securities Co. Ltd., Mitsubishi UFJ Morgan Stanley Securities Co. Ltd., Mizuho Securities Co. Ltd., Nomura Securities Co. Ltd., and SMBC Nikko Securities Inc.