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Philippines raises $2.75 bln in global bonds at record low coupons

Published 12/03/2020, 10:49 AM
Updated 12/03/2020, 10:50 AM

MANILA, Dec 3 (Reuters) - The Philippines raised $2.75
billion from the sale of new 10.5-year and 25-year U.S. dollar
denominated bonds, with the government securing its lowest-ever
cost of financing, officials said on Thursday.
The 10.5-year tranche was issued with a coupon of 1.648%,
while the 25-year tranche was priced at 2.65%.
Philippine central bank governor Benjamin Diokno said these
were the lowest coupon rates secured for the debt.
Investor appetite was strong for the Philippines' third
global bond offering this year as positive news on COVID-19
vaccine trials has boosted inflows into Asia-Pacific credit
markets. The Philippines, one of Asia's most active issuers of
sovereign debt, would use the proceeds from the bond sale to
support its budget, the Bureau of the Treasury said.
Both chambers of congress have approved a record 4.5
trillion pesos ($94 billion) budget for 2021, part of which will
be used to purchase COVID-19 vaccines as the government aims to
immunize a third of its 108 million population.
Finance Secretary Carlos Dominguez said the success of the
bond offering underpinned investor confidence in the Philippine
economy's strong fundamentals despite the global economic
downturn caused by the pandemic.
The Philippines raised 1.2 billion euros by selling its
first ever zero coupon three-year euro-denominated bond in
January, and raised another $2.35 billion from a dual tranche
U.S. dollar bond offering in April. The Philippines sank deeper into recession in the third
quarter, but the economy is expected to bounce back next year,
as it gradually lifts coronavirus curbs to allow more businesses
to operate and more people to get back to work.
($1 = 48.0350 Philippine pesos)

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