19 January 2018 (Manila, Philippines) – The Republic of the Philippines (the “Republic”) successfully returned to the international capital markets with its offering of USD2 billion new 10-year global bonds (the “New Bonds”). The transaction marks the first time the Republic has issued a 10-year USD bond since 2014. The New Bonds were offered concurrently with a 1-day Accelerated Switch Tender Offer (“Switch”) for 14 of the Republic’s outstanding USD-denominated bonds maturing between 2019 to 2037.
The New Bonds were priced at par with a coupon of 3.000%, tighter than the initial pricing guidance of 3.300% area and a final spread of 37.8 bps over UST. The Philippines has been assigned an investment grade rating by Moody’s Investors Service, Fitch Ratings, and Standard & Poor’s.
Finance Secretary Carlos G. Dominguez said, “The strong support that this 10-year global bond float has received in the international capital markets is a testament to the deepening investor confidence in the country’s newfound status under the Duterte presidency as one of the world’s fastest-growing economies.”
“The capital raised from this bond float plus the additional revenue take from the newly-implemented TRAIN Law will help bankroll President Rodrigo Duterte’s ‘Build, Build, Build’ program to modernize the country’s infrastructure, sharpen its global competitiveness and sustain rapid—and inclusive—growth as well as financial inclusion for all Filipinos,” Dominguez added.
Of the total new issuance, USD1.25 billion was allocated to the participants of the Switch exercise. The remaining USD750 million was allocated to new money investors.
This liability management exercise is in line with the Republic’s goal of achieving significant cost savings through the reduction of overall interest expense.
Citigroup and Standard Chartered Bank acted as dealer managers for the Switch exercise and acted as joint global coordinators for the New Bond issuance.
Citigroup, Credit Suisse, Deutsche Bank, Morgan Stanley, Standard Chartered Bank, and UBS acted as joint deal managers and book runners for the issuance of the New Bonds.
