THE PHILIPPINES on Thursday initiated its issuance of dual-tranche US-dollar global bonds, along with a euro sustainability bond, representing its first entry into the global debt market in 2023.<\/p>\n
In an announcement, the Bureau of the Treasury (BTr) revealed its 10-year and 25-<\/span>year fixed-rate global bonds and seven-<\/span>year euro sustainabilit<\/span>y bonds. <\/span><\/p>\n \u201cThis represents the Republic\u2019s inaugural EUR (euro) sustainability bond and also signifies the Republic\u2019s return to EUR bond markets since April 2021. <\/span>The USD (US dollar) 25-year Global Bond and EUR 7-year bond will be issued under the Republic\u2019s Sustainable Finance Framework,\u201d the Treasury stated. <\/span><\/p>\n National Treasurer Sharon P. Almanza communicated in a Viber message that the government aims to offer benchmark-sized bonds. <\/span><\/p>\n Benchmark-sized offerings are generally valued at no less than $500 million. <\/span><\/p>\n The Treasury indicated that the proceeds from the 10-year dollar bonds will be allocated for <\/span>general budget funding. <\/span><\/p>\n Proceeds from the 25-year dollar and seven-year euro sustainability bonds will be utilized to refinance assets in accordance with the Philippines\u2019 Sustainable Finance Framework.<\/span><\/p>\n \u201cThe initial price guidance (IPG) for the USD 10-year and 25-year tranches was set at Treasuries +120 basis points (bps) area and 6.100% area respectively, while the IPG for the EUR 7-year tranche was stated at MS (mid-swap) +160 bps area,\u201d the Treasury reported.<\/p>\n The transaction was expected to be priced during the New York session on Thursday.<\/p>\n \u201cWith a favorable market evolving over the week, we perceive a timely opportunity for the Republic to re-enter the capital markets. Our objective is to leverage the current market momentum to achieve the most eff<\/span>icient cost dynamics given possible uncertainties in the near future. We anticipate ongoing support from our esteemed investors,\u201d Ms. Almanza commented in a statement.<\/p>\n Citigroup, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, Standard Chartered and UBS are <\/span>the joint lead managers and joint bookrunners. <\/span><\/p>\n HSBC, StanChart and UBS also serve as joint sustainability structuring banks.<\/p>\n A trader noted in a text message that interest in the global bond offering might reach as much as $2 billion.<\/span><\/p>\n \u201cIt seems this is primarily for refinancing a maturing dollar bond,\u201d the trader remarked.<\/p>\n As per Bloomberg News, the Philippines has approximately $1.5 billion in dollar bonds maturing in March and \u20ac650 million in euro-denominated debt due in April.<\/p>\n Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort conveyed in a Viber message that the bond sale could entice investors seeking higher returns as US Treasury yields remain elevated.<\/p>\n \u201cWe anticipate strong interest from foreign investors who aim to take advantage of yield pickup,\u201d the trader similarly noted.<\/p>\n