MANILA – The Philippines on Wednesday raised 1.2 billion euros from its first overseas bond sale for the year, officials said, as the government sought to fund an ongoing infrastructure overhaul and social welfare programs.
Finance secretary Carlos Dominguez in a statement said Manila issued nine-year bonds at the lowest-ever coupon or interest and three-year euro bonds at an unprecedented zero coupon.
Oversubscription or demand that exceeded the 1.2-billion euro offer, peaked at 4.3 billion euros, national treasurer Rosalia de Leon said.
“Orders came from a diverse group of investors both in the onshore and offshore market, with frequent as well as new names on the books. We are also reaping the benefits of actively engaging investors prior to going out in the market,” de Leon said.
Government sold 600 million euros in three-year zero coupon bonds at 10-percent yield, with a spread of 40 basis points above the benchmark. The nine-year bonds had a 0.75-percent coupon at 70 basis points above the benchmark.
According to Bloomberg, the actual spreads were tighter compared to the indicative spreads of 65 basis points for the three-year note and 95 basis points for the nine-year bonds. The spread, or extra yield demanded by investors, is tighter when risk is perceived to be less.
Philippine sovereign debt is rated at investment grade by all major debt-watchers and the country is seeking its first ever ‘A’ score.
It set the 2020 national budget at P4.1 trillion, which president Rodrigo Duterte signed into law in early January. (ABS-CBN News)
