The government has generated $2.75 billion (about P132.13 billion) from its latest double-tranche global bond offering, the Bureau of the Treasury (BTr) announced on Thursday.
“The new 10.5-year global bonds were priced at US Treasury spreads of T+ 70 basis points (bps) and a coupon of 1.648 percent, after an initial pricing guidance of T+ 100 bps area, while the 25-year tranche was priced at 2.65 percent, which is 35 bps tighter than initial pricing guidance of 3 percent area,” the BTr said in a statement.
Settlement is on December 10. Proceeds from the issuance will be used for general purposes, including budgetary support.
The government made the offer on Wednesday to take advantage of the constructive market backdrop after the US presidential elections.
“Positive news on the Covid-19 (coronavirus disease 2019) 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,” it said.
Finance Secretary Carlos Dominguez 3rd was quoted as saying in the statement that the success of the government’s third bond 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.”
“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.
National Treasurer Rosalia de Leon said the successful issuance again testified to the resilience and resolve of the government to emerge from the tribulations caused 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,” she added.
Finance Undersecretary Mark Dennis Joven said that, “despite the ramifications of Covid-19 on financial markets, especially in the Asia-Pacific region, the [country’s] successful dual-tranche issuance speaks volumes about the confidence of the market in the fundamentals of the economy, sound credit profile, and its growth trajectory.”
Credit Suisse, Daiwa Capital Markets, Deutsche Bank, Morgan Stanley, Standard Chartered Bank and UBS were the joint bookrunners for the issuance.
The offer secured investment-grade ratings from S&P Global Ratings, Moody’s Investors Service and Fitch Ratings. S&P assigned a “BBB+” long-term foreign currency rating to the issuance; Moody’s, a senior unsecured rating of “Baa2;” and Fitch, “BBB.”
This comes after the government raised $2.35 billion (about P119.07 billion) in April from its earlier double-tranche global bond offering.
The April issuance follows the country’s 1.2-billion euro double-tranche global bond offering in January, and the $1.5-billion and 750-million euro global bond offerings in 2019.