The United States Securities and Exchange Commission (SEC) has done away with the review of the country’s proposed dollar-denominated bonds and allowed the sovereign to proceed and raise $1 billion from the market.
This was learned from the Bureau of the Treasury (BTr) who said the proposed issuance of ROPs or global bonds this year will no longer be reviewed by the US SEC.
According to Deputy Treasurer Sharon P. Almanza, the agency is now assessing conditions at the market whose main preoccupation at the moment has to do with how soon the US Federal Reserve decides to recalibrate its monetary-policy stance.
Almanza said Treasury officials are ready to launch the sale of the global bonds amounting to around $1 billion this year.
“For the ROP, we just got the feedback that the [US SEC] will not conduct a full review so we would just line the issuance. I think we are almost ready for the launch of the ROP, but depending on the market conditions,” Almanza told financial reporters.
Last year the Philippines sold 25-year ROPs worth $2 billion the bulk of which, or $1.5 billion, was earmarked for so-called liability management and $500 million set aside to finance previously identified government programs.
The bonds had a coupon rate of 3.70 percent, the lowest coupon ever issued by the government. ROP bonds are shorthand for dollar-denominated IOUs issued by the Republic of the Philippines.
Last December the BTr said it needed to secure US SEC approval before it can go through with the sale of global bonds this year.
According to the Department of Finance (DOF), the successful outcome of the global bond sale last year underscored the continuing investor confidence in the leadership of President Duterte and his administration’s agenda for high and inclusive growth.
The DOF said proceeds from the global bond sale would help finance the government’s infrastructure buildup bid, or its “Build, Build, Build” program.
Order books for the 25-year global bond offering were approximately $4.5 billion. By geographical allocation, 33 percent came from Asia, 24 percent from the United States and 43 percent from Europe.
The global bond sale was the first international capital markets transaction under President Duterte last year. Citigroup, Credit Suisse, Deutsche Bank, Standard Chartered Bank and UBS acted as joint global coordinators, dealer managers and bookrunners for the transaction.