PHL raises P122B from the sale of euro bonds

An employee shows 50 euro notes in a Sarajevo bank in this photo from March 19, 2012. – REUTERS

The Philippine government raised 2.1 billion euros (122.4 billion pesos) through a three-tranche offering of euro-denominated bonds, the Treasury Office (BTr) reported.

The Philippines took advantage of the low interest rates in the euro bond market, selling 650 million euros (38 billion pesos) of global four-year bonds, 650 million euros (47 billion pesos) additional 12-year bonds and 800 million 20-year debt securities.

The proceeds will be used to support this year’s national budget, as the country continues to struggle to contain the 2019 coronavirus pandemic (COVID-19).

The BTr said in a statement on Thursday that the total tenders reached 6.5 billion euros (379 billion pesos), three times more than the original offer.

It was the largest in the country and the Fifirst sale of long-term euro bonds in history. Previously, he only published articles for three years, eight years and nine years.

Broken down, the four-year papers obtained a coupon of 0.25% or 75 basis points (bps) above the tenor euro mid swap, the 12-year papers were valued at 1.2% of rate or mid swap +105 bps, while the notes of the year gave a coupon of 1.75%, 135 bps more than the euro mid-swap.

“All tranches have tightened 25 basis points from initial price forecasts supported by a strong order book which has allowed the republic to revise its price forecast twice out of all three tranches,” the Treasury said. .

The bonds will be settled on April 28.

The latest Treasury euro bond sale topped the € 1.2 billion it raised via the two-tranche issuance in January 2020, which received € 4.3 billion in offers.

“The successful return of the Philippines to the international capital market for the second time this year reflects the disadvantages of the investor communityFidence of the country’s prospects for a strong resumption of the protracted pandemic, given that its FiFinancial preparedness has enabled the government to take all necessary COVID-19 response measures to save lives and revive the economy, ”Finance Secretary Carlos G. Dominguez III said in a statement.

The latest loan was rated Baa2 by Moody’s Investors Service, BBB + by S&P Global Ratings and BBB by Fitch Ratings.

BNP Paribas SA, Credit Suisse, Goldman Sachs, JPMorgan, Nomura and Standard Chartered Bank acted as co-lead managers and associate bookrunners for the issue.

“The success of this euro deal, which is already our fourth offer since the pandemic, confirms that we are on the right track to emerge from this crisis as a stronger and more resilient economy. In addition, the ability to extend our 20-year tenor maturities at tight prices underscores that investors do indeed have a long-term view of our return prospects, ”said National Treasurer Rosalia V. de Leon.

Mr Dominguez said earlier that the country would tap into the US bond market shortly before “rates soar”.

On March 30, the Philippines raised 55 billion yen (24.2 billion pesos) through the issuance of three-year “samurai” bonds denominated in Japanese yen.

The government operates on a budget ofFicit because it spends more than the revenues generated to fund programs that will stimulate economic growth.

It plans to raise billions of P3s this year from both local and foreign sources to fill its budget deficit which reaches 8.9% of gross domestic product. About 286 billion pesos are estimated to come from global bond issues. – Beatrice M. Laforga

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