Friday, 8 January 2010

Philippines raises $1.5B from global bond sale


The Philippines raised $1.5 billion from the sale of global bonds on Wednesday, with investors snapping up Asia's first international bond offer for the year.

Manila reopened its 6.5-percent global bonds due in January 2020 and its 6.375-percent global bonds due in October 2034.

The sale comprised a $650-million reopening of the 2020 bonds, bringing their total size to $1.4 billion; and an $850-million reopening of the 2034 bonds, bringing their total size to $1.85 billion.

“We are pleased with the strong interest shown by investors in this bond issue as this reflects continued confidence in Philippine debt papers," Finance Secretary Margarito Teves said on Thursday.

The proceeds of the bond sale, he added, would help fund infrastructure and reconstruction efforts following the devastation brought by recent typhoons.

“The transaction was heavily oversubscribed, highlighting the continued global investor support and allowing us to raise a full $1.5 billion across both tranches," National Treasurer Roberto Tan said.

He said the bond sale would further deepen the liquidity of the existing bonds and extend the duration of the country’s borrowings.

The newly issued bonds were priced at 106.25 percent and 96.5 percent, respectively. The 2020 bonds yielded 5.674 percent or an equivalent 183.7 basis points (bps) over benchmark US Treasuries, while the 2034 bonds yielded 6.664 percent or an equivalent 195.7 bps over benchmark US Treasuries.

Twenty-three percent of buyers of the 2020 debt paper came from the Philippines, a quarter from the rest of Asia, 35 percent from the US and 17 percent from Europe, Teves said.

For the 2034 bond, 19 percent came from the Philippines, 21 percent from the rest of Asia, 40 percent from the US and 20 percent from Europe.

Barclays Capital, Deutsche Bank Securities, Inc. and HSBC acted as joint lead managers and joint bookrunners for the transaction.

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