Philippines issues 8-year euro-dominated global bonds

May 10, 2019

The Philippines returned to the international capital markets with its offering of 750 million euros of 8-year global bonds, the Department of Finance ( DOF) said Friday.

The bonds are expected to be rated Baa2 by Moody’s, BBB+ by Standard & Poor’s, and BBB by Fitch[1]*. The notes are expected to settle on May 17, 2019.

This issuance marks the country's return to the European capital markets after more than a decade.

The overwhelming reception from the market allowed the pricing for the newly issued Global Bonds to tighten at EUR Midswaps +70 bps after being revised twice from an initial pricing guidance of EUR Midswaps+90-100 bps area, the DOF said.

By geographical allocation, 24 percent of the bonds were allocated to Germany, 15 percent to Italy, 10 percent to the UK 26 percent to the rest of Europe, nine percent to the US, six percent to the Philippines, five percent to the rest of Asia, and the remaining five percent to other countries.

In terms of investor type, 59 percent went to fund managers, 24 percent went to banks and corporates, 11 percent went to insurance, pension funds, and official institutions, and the remaining six percent went to other types of investors.

Finance Secretary Carlos Dominguez III said, “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.”

Dominguez said after its successful float of bonds in China and Japan, the government has issued global bonds in Europe as part of its efforts to diversify funding sources for its aggressive investments in infrastructure and human capital development.

Proceeds of the issuance will be used for the Philippines' general government purposes, including budgetary support.

“The Republic garnered outstanding support from high quality accounts with a large orderbook allowing us to increase our base offering size from EUR500 million to EUR750 million. The successful transaction allowed us to diversify our funding program to support productive spending for infrastructure and social services,” said National Treasurer Rosalia de Leon.

Deutsche Bank and UBS acted as joint global coordinators, while BNP Paribas, Credit Suisse, and Standard Chartered Bank acted as joint bookrunners for the transaction. DMS