PH back in Japanese capital market with JPY55 billion 3-yr bond

By Joann Villanueva

March 30, 2021, 7:19 pm

MANILA – S&P Global has given the Philippine government’s proposed 55-billion Japanese yen (about PHP24 billion) first-ever three-year senior unsecured zero-coupon fixed-rate Samurai bond an investment grade rating of "BBB+", same as its rating on the country.

“The notes represent direct, general unconditional, unsecured, and unsubordinated obligation of the sovereign, and rank equally with the sovereign’s other unsecured and unsubordinated debt obligations,” it said in a statement on Tuesday.

Relatively, the Bureau of the Treasury (BTr) announced that the Samurai bond offering comes after the Philippine government’s successful issuance of zero-coupon Euro bond last February.

“The new three-year Samurai tranche was priced at 21 basis points above the benchmark, the tightest spread the Republic has achieved so far since its return to the market back in 2018,” it said in a separate statement.

It added that the offer volume was hiked from the initial target of JPY30 billion “following strong investor demand allowing the deal to expand new investor base for Philippine issuances.”

National Treasurer Rosalia de Leon told journalists in a Viber message that the zero-coupon debt paper is a first for any country because “in Samurai there are zero-coupon for domestic issues but not for non-resident issuers”.

“Yield is higher than comparable in (US) dollar,” she said.

Finance Secretary Carlos G. Dominguez III, in a statement, also said the strong demand for the Philippines’ debt offering “in this precarious time underlines the continued investor confidence in our economy, brought about by its strong fiscal position and prudent management that augurs well for a robust and sustainable recovery from the economic turmoil brought about by the Covid-19 pandemic”.

“This bond offering brings to light the government’s relentless drive to generate sufficient resources to fund its Covid-19 response and other priority programs that are meant to return the country soon enough to the path of high and inclusive growth,” he said. (PNA)