Philippines raises $500 million from first zero-coupon samurai bonds

MANILA, Philippines — The government raised $500 million from the issuance of its first ever zero coupon yen-denominated bonds, the Bureau of the Treasury (BTr) said yesterday.

The Philippine successfully returned to the samurai bond market with the pricing yesterday of its 55-billion-yen offering of three-year bonds at a coupon rate of 0.001 percent.

This followed the country’s zero-coupon bond issuance in the euro market in February last year.

BTr said the initial target size of 30 billion yen was upsized to 55 billion yen following strong investor demand.

The bonds, which mature on April 12, 2024 were assigned ratings of Baa2 from Moody’s, BBB+ from S&P, and A- by Japan Credit Rating Agency.

The notes will be settled on April 13.

Finance Secretary Carlos Dominguez said it was a good time to borrow overseas “while rates are still relatively low.”

National Treasurer Rosalia de Leon said this was also the first zero-coupon issuance in the samurai bond market by any sovereign.

“The Philippines’ successful return to the Japanese bond market at this precarious time underlines the continued investor confidence in our economy,” said Dominguez.

The government plans to raise as much as $5.5 billion from offshore debt markets this year to finance its pandemic-response.