Philippines returns to international capital markets with $2 billion global bonds
On Wednesday, the Philippines successfully returned to the international capital markets for the third time this year with a benchmark $2 billion three tranche 5-, 10.5- and 25-year SEC-Registered Fixed Rate Global Bonds.
The 25-year Global Bonds were issued under the sustainable
finance framework and marks the country’s third ESG G3 bond offering.
The transaction follows the 70.1 billion yen four-tranche Samurai bond offering in April and $2.25 billion three-tranche bond offering in March.
The new 5- and 10.5-year tranches were priced at US Treasury plus 120 and 185 basis points with a coupon of 5.170 percent and 5.609 percent respectively, 35 bps tighter than an initial pricing guidance of US Treasury plus 155 and 220 bps area, respectively.
The 25-year sustainability tranche was priced at 6.100 percent with a coupon of 5.950 percent, 45 bps tighter than initial pricing guidance of 6.550 percent area.
The 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 settle on October 13, 2022.
Despite the ongoing weakness in global credit markets amid high inflation and rising US interest rates, the Republic was able to navigate volatile market conditions and successfully price the Global Bonds.
The Republic attracted interest from a diverse pool of international
investors, showcasing strong investor appetite globally for the Republic.
Finance Secretary Benjamin Diokno said, “The strong demand for our first
international bond offering under President Marcos’ administration demonstrates investor confidence in the new government and the administration’s six-year plan of economic transformation to a more inclusive, resilient, and prosperous economy.
The eight-point agenda of the new administration will improve real GDP growth, improve government finances, protect purchasing power, mitigate socioeconomic scarring and create more quality jobs.”
Philippine economic briefings were held in Singapore and New York last month, attended by President Ferdinand Marcos Jr., and received strong interest and attendance from global investors and other international delegates.
Undersecretary Mark Dennis Joven said, “We are pleased to see that the Republic’s US dollar bond offering has once again received overwhelming interest across all tranches. The repeated successes of all international bond issuances by the Republic reflects the strong following from the global investor community for the Philippines and is a testament to the
Republic’s robust credit profile and sound government finances.” Bureau of Treasury
