PHL sells $2B of 25-year global bonds at 3.7%
The Philippine government on Thursday raised $500 million worth of 25-year global bonds maturing in 2042 at a coupon rate of 3.7 percent, in conjunction with a one-day accelerated switch tender offer.
The transaction involved the switching of $1.5 billion of shorter maturing bonds from existing bondholders who were targeted in this tender offer to switch into the new global bonds.
The US dollar bonds involved in the switch were maturing between 2019 and 2037, the Department of Finance said in a statement on Friday.
"This represented the tightest priced long-dated global bond offering ever issued by the Republic on a spread basis, while the yield of 3.70 percent achieved by the Republic on this transaction was on a par with the Republic's 25-year bond offering in 2016," the DOF said.
The bond offer has attracted $4.5 billion of book orders of which 33 percent was from Asia, 24 percent from the US, and 43 percent from Europe.
The DOF noted it was the first international capital markets transaction for the Duterte administration.
“I look at these results as a manifestation of the confidence of global investors in the leadership of the new administration, which has committed to pursue sound economic management and reforms to improve economic competitiveness, productivity and living standards as well as drastically reduce poverty,” Finance Secretary Carlos Dominguez III said.
“We accepted the $2 billion for new cash and bonds switch in accordance with our international capital fund raising program for 2017. With this transaction, the Republic has extended its excellent track record in executing liability management transactions," Dominguez said.
The proceeds from the issuance will fund the government's tender offer and related expenses while the remaining amounts will be used for general purposes, including budgetary support.
"Amid the volatility in global markets, we have managed to garner robust support from the fixed income investor community, a testament to the resilience of the Philippine economy as well as the strong faith that these investors have in the Duterte administration in executing and implementing reforms and strategies," National Treasurer Roberto Tan said.
Citigroup, Credit Suisse, Deutsche Bank, Standard Chartered Bank and UBS served as joint global coordinators, dealer managers and bookrunners for the transaction.
Reference:
http://www.gmanetwork.com/news/story/596445/money/economy/phl-sells-2b-of-25-year-global-bonds-at-3-7#sthash.meG7DsWP.dpuf