Sunday, December 3, 2023

Govt secures $3B from global bond offer

The Bureau of the Treasury (BTr) said the government raised $3 billion (about P145 billion) through its latest two tranche global bond sale.


“The new 10.5-year global bonds were priced at US Treasury spreads of T+ 60 basis points (bps) with a coupon of 1.95 percent, tightening by 30 bps from an initial pricing guidance of T+ 90 bps area. The 25-year tranche was priced at 3.25 percent with a coupon of 3.20 percent, 30 bps tighter than initial pricing guidance of 3.55 percent area,” it said.


Settlement is on July 6 this year. Proceeds from the issuance will be used for general purposes, including budgetary support.


Despite market volatility following the Federal Open Market Committee meeting in June, the Treasury bureau said the government was able to benefit from strengthening dynamics in both the Treasury and credit markets.


“The success of this second issuance of global bonds this year highlights the continuing confidence of the international investor community in the Philippines. It shows that investors appreciate the Duterte administration’s heightened efforts to revive the economy back to pre-pandemic levels while maintaining fiscal responsibility,” according to Finance Secretary Carlos Dominguez 3rd.


“The Republic’s success in international debt markets underscores the attractiveness of the Republic’s credit profile to the investor community, and the market’s confidence in its economic fundamentals going forward,” said Undersecretary Mark Dennis Joven.


“The heavy bias towards the 25-year offering underscores the enduring attractiveness of Philippine credit even against the many waves of tribulations stemming from this pandemic,” National Treasurer Rosalia de Leon, meanwhile, remarked. “Investors see our economic revival is imminent, strong, and long lasting.”


The deal was co-booked by Bank of China, Deutsche Bank, Goldman Sachs, Morgan Stanley, MUFG Securities, Standard Chartered Bank, and UBS.


It follows the government’s $2.75 billion dual tranche global bond offering in December 2020 and its 2.1 billion euro triple tranche global bond offering in April of this year.


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