Philippines' debut 'Panda' bond sale raises $230 million

Proceeds from the sale of yuan-denominated bonds will be deposited with the central bank as part of its international reserves.

Philippines' debut 'Panda' bond sale raises $230 million
Ian Nicolas Cigaral (Philstar.com) - March 20, 2018 - 7:32pm

MANILA, Philippines — Chinese investors swarmed the Philippines' maiden issuance of renminbi-denominated bonds, which raised 1.46 billion RMB ($230 million) as demand exceeded the amount on offer, the government reported Tuesday.

In a statement, state-run Investor Relations Office said orders for the Philippines' first “Panda” bond issue—with a term of three years and coupon rate of 5.0 percent or 35 basis points—stood at 9.22 billion RMB.

That was 6.32 times bigger than the amount of the instruments offered and is the all-time largest coverage for any Panda sovereign issuer, the IRO said.

"The Philippine government’s successful inaugural issuance of Panda bonds highlights the investor confidence that the country enjoys on the back of its strong credit profile," Finance Secretary Carlos Dominguez III said.

The Philippines is the first Southeast Asian country to offer Panda bonds.

Proceeds from the sale of yuan-denominated bonds will be deposited with the central bank as part of its international reserves.

When converted to Philippine peso, the returns will help provide budgetary support for the Duterte administration's ambitious infrastructure projects, among others.

Manila is also planning to issue yen-denominated bonds later this year.

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