THE Philippines has returned to the international bond market for the third time this year with a $2.75-billion dual tranche 10.5-year and 25-year Global Bonds to boost the country’s budget support.
In a statement, the Department of Finance (DOF) said the new 10.5- year global bonds were priced at US Treasury spreads of T+ 70 basis points (bps) and a coupon of 1.648 percent.
This was after an initial pricing guidance of T+ 100 bps area, while the 25-year tranche was priced at 2.65 percent, which is 35 bps tighter than initial pricing guidance of 3 percent area.
“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,” Finance Secretary Carlos G. Dominguez III said.
“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.
The new Global Bonds are expected to be rated Baa2 by Moody’s, BBB+ by Standard & Poor’s, and BBB by Fitch. Transaction is expected to settle on December 10, 2020.
Credit Suisse, Daiwa Capital Markets, Deutsche Bank, Morgan Stanley, Standard Chartered Bank, and UBS were Joint Bookrunners for the transaction.
The deal follows the government’s $2.35-billion dual tranche global bond offering in May, and the EUR 1.2-billion dual tranche global bond offering in January earlier this year.
“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,” National Treasurer Rosalia de Leon said.
“It also manifests the administration’s ability to identify and capture favorable market windows in such uncertain times. [A] 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. Cai U. Ordinario