MANILA -- The Philippines on Tuesday (London time) issued EUR 1.2 billion worth of three and nine-year Euro-denominated bonds at EUR600 million each tenor and with the shorter-dated paper fetching a zero-percent coupon rate.
National Treasurer Rosalia De Leon, in a message shared by Finance Secretary Carlos Dominguez III to journalists Wednesday, said the three-year Euro bond fetched a yield of 0.10 percent at zero-coupon with a spread of 40 basis points over benchmark.
She said the nine-year debt paper has a coupon rate of 0.75 percent, lower than the 0.875 percent the Philippines’ eight-year Euro bond issued in May 2019 fetched.
De Leon said while fair value of the Philippines’ Euro bond issued last year was 67 basis points over benchmark, this year’s issuance is better.
Although it was expected to be priced at around 75 basis points, “we managed to pierce through our ROP (Republic of the Philippines) curve by pricing at 70 bps over benchmark.
This translates to a negative new issue concession of approximately 5 bps,” she added.
De Leon earlier said they plan to issue benchmark volume of about USD500 million for this year’s Euro bond exercise, but increased the actual issuance after demand turned-out 3.58 times or 4.3 billion euro higher than the initial plan.
Demand came from a diverse group of investors both in the onshore and offshore market, she said,
“We are also reaping the benefits of actively engaging investors prior to going out in the market,” she added.
Issuance of the debt paper was made before trading in London’s financial market’s ended Tuesday.
Settlement for the bond has been set on February 3, 2020.
Dominguez said the government’s zero-coupon Euro bond is the first ever in the international market.
“Credit must go to PRRD (President Rodrigo R. Duterte) for his unwavering support for the economic management team, the DOF and (the) Bureau of the Treasury professionals and our bankers,” he added. (PNA)
