THE Philippines has returned to the international bond market for the first time this year, launching a dual-tranche US dollar-denominated bond offering that includes both a 10-year and a 25-year tranche.
National Treasurer Sharon Almanza said the government eyes to raise at least USD500 million from the issuance of US dollar bonds.
According to the Bureau of the Treasury (BTr), the initial price guidance (IPG) for the 10-year tranche is at T+120bps area and at 6.100 percent area for the 25-year tranche.
Almanza also confirmed that in addition to the dollar bonds, a benchmark seven-year euro-denominated bond, which carries an Environmental, Social, and Governance (ESG) label, will also be offered by the government with IPG at MS+160 bps area.
“This marks the Republic’s first ever EUR sustainability bond and also marks the Republic’s return to EUR bond markets since April 2021,” the BTr said.
The Marcos administration’s global bond sales seek to raise funds for its ongoing fiscal requirement and infrastructure projects.
The dollar bonds have received positive ratings from leading credit agencies, with S&P Global Ratings assigning a “BBB+” to the dollar bonds and Fitch Ratings giving the dollar and euro bonds “BBB” rating.
“The bonds represent direct, general, unconditional, unsecured, and unsubordinated obligations of the Philippines (BBB+/Positive/A-2). They rank equally with the sovereign’s other unsecured and unsubordinated debt obligations,” S&P Global Ratings said.
“Fitch Ratings has assigned the Philippines’ (BBB/Stable) proposed US dollar and euro bonds a ‘BBB’ rating. The rating is in line with the Philippines’ ‘BBB’ Long-Term Foreign-Currency Issuer Default Rating (IDR), which has a Stable Outlook and was last affirmed on 7 June 2024,” Fitch Ratings, on the other hand, said.
Both ratings reflect investor confidence in the Philippine economy despite global economic uncertainties.
“The Marcos administration’s commitment towards stronger investor dialogue is evident in our frequent investor engagements. We have constantly communicated our strategies to achieve robust socioeconomic development for the Republic, and hence, we are confident that our investors will remain receptive to the Philippine story,” Finance Secretary Ralph Recto said.
Earlier, Recto told Bloomberg in an interview on the sidelines of the World Economic Forum in Davos, Switzerland that the government targets to raise a total of USD3.5 billion from issuance of global bonds this year. (PNA)
