MANILA – The Philippines successfully returned to the international capital markets for the second time this year with the issuance of USD2.5 billion triple-tranche US dollar-denominated global bonds.
In a statement on Thursday, the Bureau of the Treasury (BTr) said the 5.5-year tranche has a yield of 4.375 percent and was priced at T+75 basis points (bps), 35bps tighter than initial price guidance, achieving 5bps new issue concession.
The new 10.5-year tranche landed at a yield of 4.750 percent and was priced at T+95bps, 30bps tighter than initial price guidance, pricing at no new issue premium.
The new 25-year Sustainability tranche, meanwhile, was priced at 5.175 percent at par, 32.5bps tighter than the initial price guidance, achieving a 2.5bps new issue concession.
The BTr said the 25-year global bond would be issued under the Republic’s Sustainable Finance Framework.
Proceeds from the sale of the 5.5-year and 10.5-year global bond will be used for general budget financing, while proceeds from the sale of the 25-year Global Bond will be for general budget financing and refinancing programs and expenditures in line with the Republic’s Sustainable Finance Framework.
The transaction is expected to settle on Sept. 5.
According to the BTr, the Philippines took advantage of moderating benchmark yields as softer inflation data and increasingly dovish Fed rhetoric fueled investor certainty of upcoming rate cuts by the Fed at their September meeting.
It added that the success of the offering illustrated the Republic’s ability to respond swiftly to capture conducive market conditions.
The BTr said the offering attracted robust demand and strong orderbook momentum that was carried across markets.
It added that interest came from a diverse pool of high-quality global accounts, showcasing investors’ continued confidence in the country's credit profile and long-term outlook.
"We are very pleased to see the overwhelming investor interest in our new USD2.5 billion triple-tranche global bonds. In fact, compared to our regional peers, the Philippines’ issuance achieved among the best pricing in all of our tranches this year. This is a resounding vote of confidence in our country’s solid credit profile,” Finance Secretary Ralph Recto said.
“More importantly, this is a significant win for every Filipino as we are raising funds at very affordable costs to support programs and projects that will boost economic growth, create quality jobs, increase incomes, and reduce poverty.”
National Treasurer Sharon Almanza, meanwhile, said the positive reception and tight pricing of the new securities reflect continued investor confidence in the country's creditworthiness and robust economic performance, even amid a challenging global environment.
"The exceptionally tight pricing across all offerings enables the government to conserve on interest payments, thereby allowing more fiscal space to flow into transformative investments. Thus, the favorable outcome of the transaction further strengthens the Philippine Government's position to fulfill its commitments to fiscal consolidation and rapid economic growth,” Almanza said. (PNA)
