The Philippines raised $3 billion from the Marcos Jr. administration’s second dollar-denominated bond offering abroad, which indicates investors’ confidence in the country’s economy, according to local officials.
In a statement, the Bureau of the Treasury (BTr) said the national government was successful with its first triple-tranche US-dollar denominated bond offering overseas this year.
The issuance consisted of $500 million 5.5-year and $1.25 billion bonds 10.5-year and $1.25 billion green bonds.
The Treasury said the new 5.5- and 10.5-year tranches were priced at T+105bps and T+145bps with a coupon of 4.625 percent and 5.00 percent respectively. The final rates were “tighter” than the initial price guidance of T+155bps area (5.5-year) and T+195bps area (10.5-year).
The Global Bonds are expected to be rated Baa2 by Moody’s, BBB+ by Standard & Poor’s, and BBB by Fitch, according to the Treasury. The transaction is expected to settle on January 17, 2023.
“This transaction follows the Republic’s USD 2 billion triple-tranche bond offering in October 2022, JPY 70.1 billion four-tranche Samurai bond offering in April 2022 and USD 2.25 billion triple-tranche bond offering in March 2022,” the Treasury said on Tuesday.
Proceeds from the 5.5-year and 10.5-year bonds would be used for “general budget financing.” Ditto for the amount raised via the sale of 25-year “green” bonds, aside from bankrolling or refinancing “assets in line with the country’s sustainable finance framework.”
Finance Secretary Benjamin E. Diokno said the economic managers are pleased to see the international investors’ “recognition” of the country’s “strong economic recovery, sound fiscal policies, and sensible socioeconomic agenda to promote sustainable and inclusive economic growth.”
“The robust demand for our first international bond offering in 2023 represents a strong vote of confidence by international investors,” he said in a statement. Diokno disclosed that the Philippines’s latest overseas bond issuance was met with a “strong order book” that peaked at around $28.2 billion for all tranches.
“It is a testament to the Republic’s sound economic fundamentals and the resilience of our economy in the face of volatile global financial markets,” he added.
National Treasurer Rosalia V. de Leon said the “blockbuster” reception and “tight” pricing achieved by the Philippines across all tranches “reaffirms” the “distinction” of the Philippine credit as a “favored proposition even in times of uncertainties.”
“It is both a reward for our masterful navigation of the pandemic crisis and a motivation to become a beacon for growth in a period of dimming global prospects,” de Leon said.
For the whole year, the national government plans to borrow P2.207 trillion with a 75:25 mix in favor of domestic sources.