PHL raises USD2.25bn via offshore bonds

  • THE PHILIPPINES raised USD2.25bn from its first triple tranche US dollar-denominated bond offering, which included its first-ever green bonds, despite heightened market volatility from the Russia-Ukraine crisis and the start of the US Federal Reserve’s policy tightening cycle.
  • TheBureau of the Treasury (BTr) said it raised USD1bn from the inaugural 25-year green bond offer, as well as USD500mn from 5-year bonds, and USD750mn from 10.5-year bonds.
  • The Treasury said the new five-year global bonds were priced at 90 basis points (bps) over Treasuries or a coupon of 3.229%.
  • This was after the initial price guidance of 125 bps over the Treasuries area. The 10.5-year bonds were priced at 3.556% or 125 bps over Treasuries, after the initial guidance of 165 bps over the Treasuries.
  • The 25-year notes were priced at 4.2%, 50 bps tighter than the initial guidance of 4.7%.
  • “After a few weeks of volatility in the global equity and credit markets, the Republic was able to take advantage of the improving market sentiment (after) the FOMC (Federal Open Market Committee) meeting,” the BTr said.
  • The BTr said proceeds from the shorter-term tenors will be used for budget financing, while those from the 25-year global bonds will be used for the government’s sustainable finance program.
  • The deal is expected to be settled on 29 Mar 22. Maturity dates for the 5-, 10.5-, and 25-year bonds are in Mar 27; Sep 32; and Mar 47, respectively. The global bonds were rated “Baa2” by Moody’s Investor’s Service, and are expected to be rated “BBB+” by S&P Global Ratings, and “BBB” by Fitch Ratings.

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