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The Philippine government has entered the global bond market again 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, 10.5-year, 25-year two-tranche global bonds,” the Finance Department said Thursday ( DOF).
The Finance department said that the 10.5 and 25-year global bonds had a coupon price of 1.648% and 2.65%, respectively. This is the lowest coupon level 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.
The proceeds of the issuance will be for general government purposes, including budget support.
Positive news about COVID-19 vaccine trials over the past two weeks has created strong inflows into Asia-Pacific credit markets, illustrating the country’s ability to capitalize on favorable market dynamics, according to the DOF.
The latest issuance follows the government’s $ 2.35 billion two-tranche global bond offering in May, and the € 1.2 billion two-tranche global bond offering in January.
“The success of our third offering this year in the international capital markets supports the international investor community’s recognition of the strong fundamentals of the Philippine economy despite the global economic recession caused by the COVID-19 pandemic,” he said the Secretary of Finance Carlos Domínguez.
“We believe this result indicates that international investors know and appreciate the Duterte administration’s determination to rebuild the national economy and its initial advance to bring it back to its pre-COVID growth trajectory,” he added.
For her part, National Treasurer Rosalía de León said that the success of the latest broadcast is once again a testament to the resistance and determination shown by the Philippines to “rise from these tribulations caused by the pandemic.”
“It also demonstrates the management’s ability to identify and capture favorable market windows in such uncertain times. Much of this success can be attributed to reforms designed to provide the catalysts to accelerate the recovery and return strong growth momentum to the economy, ”said De Leon.
Credit Suisse, Daiwa Capital Markets, Deutsche Bank, Morgan Stanley, Standard Chartered Bank and UBS were the joint book brokers for the transaction. – MDM, GMA News
