PH global bond sale successful – Treasury
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Tue, 08 Jan 2019 16:30:47 +0000
The Philippines has made a successful return to the international capital markets, the Treasury bureau announced on Tuesday. raising $1.5 billion via a 10-year global bond offering.
“The newly issued global bonds were priced at US Treasury spreads of T+110 bps (basis points) after an initial pricing guidance of T+130 bps,” it said in a statement.
Settlement has been set for January 14 and proceeds of the issuance will be used for general government purposes, including budgetary support.
The government, the Treasury said, announced the issuance on Monday to capitalize on positive market results at the end of last week.
The issuance marked the first emerging market sovereign US dollar bond offering for 2019 and “demonstrates the Republic’s ability to respond tactically to conducive market conditions to capture a favorable issuance window,” it added.
Thirty-seven percent of the bonds were allocated to Asia, 28 percent to the US and 35 percent to Europe.
By investor type, 52 percent went to asset managers, 22 percent to banks, 14 percent to sovereign wealth funds, pension funds and insurance, and the remaining 12 percent to private banks and other investors.
“This transaction further illustrates deepening investor confidence in the Philippines’ growth story and the Duterte administration’s ability to maintain fiscal discipline while spending big on infrastructure modernization, human capital development and social protection for the poor,” Finance Secretary Carlos Dominguez 3rd also said in the statement.
National Treasurer Rosalia de Leon, meanwhile, said: “We have garnered strong support from the global fixed income investor community despite recently heightened volatilities in the global markets.
“This demonstrates strong conviction from the global investor community on the Republic’s economic fundamentals as well as the depth of the Republic’s investor outreach,” she added.
Bank of China, J.P. Morgan, and Standard Chartered Bank acted as joint global coordinators for the transaction while Citigroup, Credit Suisse, Goldman Sachs (Asia) L.L.C., and UBS acted as joint bookrunners for the transaction.
The US dollar-denominated notes obtained an investment grade Baa2 senior unsecured rating from Moody’s Investors Service, a ‘BBB’ long-term foreign currency rating from S&P Global Ratings, and an expected rating of ‘BBB’ from Fitch Ratings.
Last year, the government successfully raised $2 billion via 10-year global bond issue, which received a tight spread of 37.8 basis points over US Treasuries.
Of the $2-billion offering, $1.25 billion was allocated to participants of a switch exercise for 14 of the country’s outstanding dollar-denominated bonds maturing between 2019 and 2037.
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