Philippines launches third int’l bond offering

The Philippine government has entered the global bonds market anew this year to raise more funds in a bid to boost its war chest to address the economic impact of the COVID-19 pandemic.

“The Republic of the Philippines successfully returned to the international capital markets for the third time this year with its offering of $2.75 billion dual tranche 10.5-year and 25-year global bonds,” the Department of Finance (DOF) said Thursday.

The Finance department said the 10.5-year and 25-year global bonds were priced at a coupon rate of 1.648% and 2.65%, respectively. This is the lowest coupon level that the Philippines has achieved in the US dollar bond market.

The latest global bonds are expected to be rated Baa2 by Moody’s, BBB+ by Standard & Poor’s, and BBB by Fitch.

The transaction is expected to be settled on December 10, 2020.

Proceeds of the issuance will be for the government’s general purposes, including budgetary support.

Positive news on the COVID-19 vaccine trials over the past couple of weeks have created strong inflows in Asia-Pacific credit markets, which illustrates the country’s ability to capitalize on favorable market dynamics, according to the DOF.

The latest issuance follows the government’s $2.35-billion dual tranche global bond offering in May, and the €1.2-billion dual tranche global bond offering in January.

“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 Dominguez 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.

For her part, National Treasurer Rosalia de Leon said the success of the latest issuance is once again a testament of the resilience and resolve shown by the Philippines to "ascend from these tribulations brought about by the pandemic."

“It also manifests the administration’s ability to identify and capture favorable market windows in such uncertain times. 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,” De Leon said.

Credit Suisse, Daiwa Capital Markets, Deutsche Bank, Morgan Stanley, Standard Chartered Bank, and UBS were joint bookrunners for the transaction.  - MDM, GMA News