Investors swamp Phl global bond offer

MANILA, Philippines - A total of $1.5 billion was raised yesterday from the government’s issuance of new global bonds maturing in 2037.

Investors swamped the Philippines’ debt sale with orders reaching $12.5 billion for the five-percent global bonds, Finance Undersecretary Rosalia de Leon said.

In a separate statement issued by the Department of Finance (DOF), the government said it was able to save on borrowing costs.

“The newly issued bonds were priced at par to yield five percent or an equivalent of 196.2 bps over benchmark US Treasuries,” the DOF said.

The government processed orders for about 15 hours, with majority of investors coming from the US.

By geographical allocation, 25 percent came from the Philippines, 25 percent from the rest of Asia, 35 percent from the US and 15 percent from Europe.

Fiscal authorities welcomed the strong demand for Philippine bonds.

Finance Secretary Cesar Purisima said the latest transaction allowed the government to lengthen the country’s debt maturity profile.

“We are very pleased to have once again been able to extend the Republic’s maturity profile while at the same time achieving the lowest yield for a new 25-year benchmark US dollar global offering by the Philippines,” Purisima said.

 National Treasurer Roberto Tan, for his part, said the latest foray in the debt market allowed the Philippines to achieve its funding goals.

“Positive investor reception for this transaction allowed us to achieve our funding objectives in support of our fiscal program,” Tan said.

The Philippines tapped Deutsche Bank and Standard Chartered Bank as joint global coordinators while Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JP.Morgan, Standard Chartered Bank and UBS acted as joint bookrunners for the transaction. 

For the past several years, the Philippines has issued global bonds ahead of its neighbors in the region, usually covering bulk of its annual foreign debt requirement as early as January.

In the first week of January last year, the government sold $1.25 billion in peso-denominated global bonds. It also sold $1.5 billion from a global bond sale in March last year.

The government plans to borrow $4.02 billion from external sources this year, lower than the programmed $4.5 billion for last year, according to the latest data from the DOF.

Of the $4.02 billion, the government plans to borrow $2.25 billion to $2.5 billion from the commercial debt market and to borrow $1.77 billion worth of program and project loans.