The BTr did not disclose how much it planned to offer, although previous reports have quoted Deputy Treasurer Ma. Sharon Almanza as saying that the size of the transaction is $2 billion. File

Philippines launches 10-year US dollar bond offer
Ian Nicolas Cigaral ( - January 18, 2018 - 6:15pm

MANILA, Philippines — The Philippine Bureau of the Treasury on Thursday announced the launch of its 10-year global bond offer that seeks to provide budgetary support for the Duterte administration.

The bureau made the announcement in a statement posted on its website.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, Standard Chartered Bank, and UBS AG Hong Kong Branch will act as joint lead managers for the new bond offering.

The BTr did not disclose how much it planned to offer, although previous reports have quoted Deputy Treasurer Ma. Sharon Almanza as saying that the size of the transaction is $2 billion.

According to Almanza, the global bond offer would involve $1 billion in new money and $1 billion for liability management.

Finance Secretary Carlos Dominguez earlier said international banking institutions, including European banks, have expressed interest in the government’s planned dollar-denominated global bond float.

Proceeds from this issuance will be used to redeem outstanding bonds, as well as for general purposes including budgetary support.

Early last year, the government raised P99.57 billion through the sale of global bonds. Under this fund-raising activity, the government generated $500 million from the issuance of fresh 25-year global bonds at a rate of 3.7 percent. Another $1.5 billion in debt was swapped.

As it plans to ramp up spending, particularly on infrastructure, the national government is programmed to borrow P889.51 billion in 2018 from local and foreign lenders.

Of the amount, 26 percent will come from foreign financing, while the remaining 74 percent will be borrowed domestically.

The Duterte administration has set an P8.44-trillion infrastructure spending plan until 2022 to spur gross domestic product growth to 7-8 percent starting this year from a targeted 6.5-7.5 percent in 2017.

Moody’s assigns provisional ‘Baa2’ rating 

Also on Thursday, Moody's Investors Service assigned a provisional (P)Baa2 senior unsecured rating to the Philippines' US dollar bond offering, mirroring the government’s issuer rating of Baa2 with a stable outlook.

 “Moody's expects to remove the provisional status of the rating upon the closing of the proposed issuance, and a review of the final terms,” the debt watcher said

“The Philippines' Baa2 government bond rating balances the sovereign's sound economic and fiscal fundamentals against structural challenges to competitiveness and increased domestic political risk,” it added.

“Strong real GDP growth — among the fastest in Asia-Pacific and similarly-rated sovereigns — has been supported by robust domestic demand, which has provided a buffer against external economic shocks.”

READ: Fitch upgrade bodes well for Philippine bond sale

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