Manila, 8 September 2015– The Republic of the Philippines (the “Republic”) announced today the results of its most recent domestic liability management transaction. The transaction saw a tremendous response from the market with total tenders of eligible bonds amounting to PHP388 billion – about PHP134 billion for the benchmark bonds due 2025 (“2025 bonds”), and over PHP254 billion for the benchmark bonds due 2040 (“2040 bonds”) while submissions for new subscription offers for the 2025 bonds reached approximately PHP21 billion. This represents an oversubscription of at least 3.88x for the total transaction over the indicated minimum issue size of PHP50 billion per tranche.

The strong response also allowed the Republic to price the 2025 bonds and 2040 bonds at the minimum coupon rates of 3.625% and 4.625%, respectively. The Republic accepted total exchange offers of eligible bonds of around PHP237 billion and new subscription offers of about PHP9.6 billion in the 2025 bonds. As a result, the Republic has established new benchmark bonds in the amount of PHP121 billion of 2025 bonds and over PHP142 billion of 2040 bonds.

The domestic bond exchange transaction forms part of the Republic’s liability management program to establish liquid benchmarks to promote liquidity and generate interest expense savings.

The transaction will result in interest expense savings of about PHP2.4 billion in the first year which can be used by the Republic for initiatives that will help sustain the country’s impressive growth record. The average coupon of accepted bonds decreased by 132 basis points as a result of the transaction. Eligible bonds accepted and exchanged into the new benchmark bonds had their average maturity lengthened by 10.7 years.

Finance Secretary Cesar V. Purisima said, “The transaction has helped the Republic achieve its debt management objectives while also providing investors with new benchmark bonds in exchange for illiquid bonds. Amid turbulence around the world, the overwhelming response we received from the market is an unequivocal show of strength and stability on the part of the Republic. With the introduction of two tranches of exit bonds this year, the Republic continues to provide innovative solutions in line with investors’ needs.”

Treasurer of the Philippines Roberto B. Tan added, “We are very pleased with the unwavering support from the market. We will continue to work with investors to ensure that the Republic maintains an efficient debt portfolio while achieving competitive funding rates.”

BPI Capital Corporation, Citicorp Capital Philippines, Inc., The Hongkong and Shanghai Banking Corporation Limited and Land Bank of the Philippines acted as Joint Global Coordinators, and BDO Capital & Investment Corporation, BPI Capital Corporation, Citicorp Capital Philippines, Inc., Deutsche Bank AG, Manila Branch, Development Bank of the Philippines, First Metro Investment Corporation, The Hongkong and Shanghai Banking Corporation Limited, and Land Bank of the Philippines acted as Joint Deal Managers on this transaction.