PH raises $842M from euro bonds
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Fri, 10 May 2019 16:25:51 +0000
STRONG investor demand has enabled the government to raise $842 million from its issuance of euro bonds, the Bureau of the Treasury (BTr) said on Friday.
In a message to reporters, National Treasurer Rosalia de Leon said the amount generated — 750 million euros when converted — was an upsize of the initial 500-million-euro benchmark offering.
“The orderbook peaked at almost 3 billion euros, which is six times [oversubscribed] from our original target of only 500 million [euros],” she added.
The eight-year euro bond fetched a coupon rate of 0.875 percent, according to her.
“The overwhelming reception from the market allowed the pricing for the newly issued global bonds to tighten at EUR Midswaps +70 bps (basis points) after being revised twice from an initial pricing guidance of EUR Midswaps+90-100 bps area,” the Treasury said in a separate statement.
Transactions are expected to be settled on May 17.
The issuance has been assigned investment-grade ratings of “BBB” and “Baa2” by S&P Global Ratings and Moody’s Investors Service, respectively.
Proceeds will be used for general government purposes, including budgetary support.
“This successful transaction is a testament to the international investor community’s vote of confidence in the country’s strong macroeconomic fundamentals and sustained high growth prospects despite global financial headwinds,” Finance Secretary Carlos Dominguez 3rd said.
De Leon, meanwhile, pointed out that the transaction allowed the government to diversify its funding program to support productive spending for infrastructure and social services.
“There was good reception from high-quality and real-money investors, especially from Europe, despite lower-than-expected GDP (gross domestic product) figures and ongoing tensions between US and China,” she added.
The Philippine economy recorded a first-quarter GDP growth rate of 5.6 percent, a slowdown from last year’s 6.5 percent and below the government’s 6.0-to-7.0 percent downwardly revised target for 2019.
By geographical allocation, 24 percent of the bonds were allocated to Germany, 15 percent to Italy, 10 percent to the United Kingdom, 26 percent to the rest of Europe, 9 percent to the US, 6 percent to the Philippines, 5 percent to the rest of Asia, and another 5 percent to other countries.
In terms of investor type, 59 percent went to fund managers; 24 percent, banks and corporates; 11 percent, insurance, pension funds and official institutions; and the rest, other types of investors.
Deutsche Bank and UBS were the transaction’s joint global coordinators, while BNP Paribas, Credit Suisse and Standard Chartered Bank were the joint bookrunners.
The post PH raises $842M from euro bonds appeared first on The Manila Times Online.