$1-billion Samurai bond issue eyed in Q3 2018

MANILA, Philippines — The Philippine government plans to issue $1 billion worth of Samurai bonds or yen-denominated securities in the third quarter of the year, a top official of the Bureau of the Treasury (BTr) said yesterday.

In an interview, National Treasurer Rosalia De Leon said the BTr is seeking both internal and external approvals for the issuance of Samurai bonds amounting to $1 billion.

“About $1 billion,” De Leon said when asked for the volume of the Samurai bond issuance.

De Leon said the offering would involve several tenor buckets, but they have yet to be determined by the government.

“We are looking at various tenors because they have different pricing. Right now, we haven’t really pinned down the exact tenor. So we might be looking at various tenors including three, five, seven, 10, and 20-year,” the official said.  

According to De Leon, the BTr has already started the process of securing approvals from regulators both from the Philippines and Japan.

She said the bureau is awaiting the approval of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP).

However, she said the Philippine government still has to apply for approval with the Japanese Securities and Exchange Surveillance Commission.

If the process goes smoothly, De Leon said the yen-denominated bond issuance is targeted to be conducted by the third quarter of the year. But she clarified the timing would still depend on market conditions.

“We have to continue to be watchful of the market. We want to get good pricing so it’s not like right after, we will immediately plunge into the issue. There’s a strategy there,” De Leon said.

Aside from Samurai bonds, the Philippine government is still looking into issuing US-dollar denominated global bonds.

Both Samurai bonds and global bonds would form part of the government’s borrowing program for 2018.

Earlier, the Development Budget Coordination Committee (DBCC) raised the share of foreign loans in the country’s total borrowing mix.

From the previously approved level of 74:26—in favor of domestic sources—the borrowing mix was adjusted to 65:35.

This translates to P640 billion in domestic borrowings and P346 billion in external credit, according to Deputy Treasurer Sharon Almanza.