Govt offers second US dollar bonds for 2020


Credit: Read the original article from Manila Times.

The government returned to the international bond market this year with its second offering of global bonds, from which it aims to raise more funds to support its budget.

Based on the government’s initial guidance, the benchmark-sized dollar bonds are dual-tranche with 10.5-year and 25-year tenors. The 10.5-year bonds will mature on June 10, 2031 and the 25-year, on Dec. 10, 2045.

The long-term bonds would carry a yield of around 100 basis points above the 10-year US Treasury benchmark. Proceeds from the offering will be used for general purposes, including budgetary support for the government.

National Treasurer Rosalia de Leon. PHOTO

National Treasurer Rosalia de Leon declined to provide the actual size of the bond offering.
The bond offer secured investment-grade ratings from S&P Global Ratings, Moody’s Investors Service and Fitch Ratings.

S&P assigned a “BBB+” long-term foreign currency rating to the issuance; Moody’s, a senior unsecured rating of “Baa2;” and Fitch, “BBB.”

“Moody’s has also assigned a provisional (P)Baa2 foreign currency senior unsecured shelf rating to the government’s shelf program that was recently registered with the Securities and Exchange Commission in the US,” Moody’s said.

“At the same time, the (P)Baa2 foreign currency senior unsecured shelf rating on the previously outstanding shelf registration was withdrawn,” it added.

The offering comes after the government raised $2.35 billion (about P119.07 billion) in April from its first double-tranche global bond offering.

This issuance was made on April 27 as the government capitalized on a short favorable market window amid broader volatility arising from concerns over the coronavirus disease 2019 pandemic.

These dollar-denominated notes received a rating of “BBB+” from S&P, “Baa2” from Moody’s; and “BBB” from Fitch.

The April issuance follows the country’s 1.2-billion euro double-tranche global bond offering in January, and the $1.5-billion and 750-million euro global bond offerings in 2019.


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