Philippines assessing investor demand for euro bonds

MANILA, Philippines — The government is making arrangements to meet with European investors to gauge their appetite for its proposed euro-denominated bond offering, according the Bureau of the Treasury.

In a text message, National Treasurer Rosalia De Leon confirmed that the BTr is eyeing to issue euro bonds, but declined to offer more details.

She said the government still needs to see the appetite of the European market before finalizing the details of the fund raising activity.

As such, Duterte said the BTr is setting up investor meetings in different key cities in Europe to spur interest and assess the demand.

According to an earlier report from Reuters, the Philippines has already set investor meetings in Zurich, Switzerland; London, England; Paris, France; Frankfurt, Germany; and Milan, Italy starting April 26.

“(We’re) still arranging for more,” De Leon told The STAR.

Reuters said the government has appointed Deutsche Bank and UBS as joint global coordinators for the bond sale, and as bookrunners together with BNP Paribas, Credit Suisse and Standard Chartered.

Meanwhile, S&P Global Ratings has assigned a “BBB” long-term foreign currency rating to the proposed euro-denominated senior unsecured notes to be issued by the country.

Aside from euro bonds, the Philippines is also planning to issue renminbi-denominated securities or panda bonds this year. This will be the second panda bond issuance of the government, after successfully raising 1.46 billion renminbi ($230 million) in the Chinese market in March last year.

De Leon earlier said the issuance may be moved to May as the government is still awaiting necessary approvals. She said the bond float may have an issue size of $300 million to $500 million.

Also in the pipeline is another samurai-bond sale this August, one year after it made a comeback in the Japanese onshore market last year.

De Leon said this bond float is being eyed at a volume ranging from $1 billion to $1.5 billion.

The national government borrows from both local and foreign creditors to finance its budget deficit, which is capped at 3.2 percent of the gross domestic product (GDP) this year.