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Friday, June 14, 2024

PH raises $3b from global bond offering

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The Philippines returned to the international capital markets for the first time in 2023 with its $3-billion triple-tranche 5.5-year, 10.5-year and 25-year fixed-rate global bonds that were met by strong interest from investors, Finance Secretary Benjamin Diokno said Tuesday.

The 25-year global bond was issued under the Republic’s Sustainable Finance Framework, marking the Philippines’ fourth G3 ESG bond offering.

It follows the country’s $2 billion triple- tranche bond offering in October 2022, JPY70.1 billion four-tranche Samurai bond offering in April 2022 and $2.25-billion triple-tranche bond offering in March 2022.

“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, 50bps tighter than initial price guidance of T+155bps area and T+195bps area, respectively. The 25-year Sustainability tranche was priced at 5.50 percent at par, 45bps tighter than initial price guidance of 5.95 percent area,” the Bureau of the Treasury said in a statement.

Global credit watcher Moody’s Investors Service on Monday gave an investment grade of “Baa2” to the bond offerings. The bonds were also rated “BBB” by Fitch Ratings. The transaction is expected to settle on Jan. 17, 2023.

“The robust demand for our first international bond offering in 2023 represents a strong vote of confidence by international investors. 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,” Diokno said.

“We are pleased to see international investors’ recognition of the Philippines’ strong economic recovery, sound fiscal policies and sensible socioeconomic agenda to promote sustainable and inclusive economic growth,” he said. Julito G. Rada

Finance Undersecretary Mark Dennis Joven said that as a seasoned issuer in the international bond markets, the Philippines again received astounding interest across all tranches of the offering.

“The continued engagement of high-quality global investors has been encouraging as it demonstrates strong confidence for the Republic’s long-term growth trajectory and sustainability commitments,” Joven said.

National Treasurer Rosalia de Leon said the “blockbuster reception” and tight pricing were achieved in all tranches of the latest offering, despite coming on the heels of curtain-raisers done by other big-name sovereigns. She said this reaffirmed the distinction of Philippine credit as favored proposition even in times of uncertainties in the market landscape.

“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.

Despite high volatility in global credit markets amid the rate hike cycle, the country took advantage of the improved market sentiments with economic data showing signs of slowing inflation and alleviating concern over Fed tightening.

Officials said the opportunistic transaction illustrated the Philippines’ ability to navigate a challenging global environment and respond efficiently to capture conducive market conditions.

The transaction attracted strong interest across all tranches from a diverse pool of high-quality investors, showcasing investors’ confidence in the Republic’s credit profile.

The government intends to use the proceeds from the sale of the 5.5- and 10.5-year global bonds for general purposes, including budgetary support. The proceeds from the 25-year global bonds will be applied to general purposes, including budgetary support and to finance or refinance assets under the Sustainable Finance Framework.

Standard Chartered Bank and UBS acted as joint sustainability structuring banks.

BofA Securities, Deutsche Bank, Goldman Sachs, HSBC, Morgan Stanley, Standard Chartered Bank and UBS acted as joint bookrunners for the transaction.


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