THE REPUBLIC OF THE PHILIPPINES ISSUES NEW 25-YEAR USD-DENOMINATED GLOBAL BONDS AND HAS ANNOUNCED THE RESULTS OF ITS INVITATION FOR OFFERS TO SELL EXISTING US DOLLAR DENOMINATED BONDS FOR CASH
The Republic of the Philippines (the “Republic”) successfully returned to the international capital markets with its offering of USD 2.0 billion of 25-year Global Bonds. The new issue of Global Bonds occurred concurrently with a 1-day Accelerated Switch Tender Offer for 16 series of USD bonds maturing between 2016 and 2037.
The newly-issued Global Bonds were priced at par with a coupon of 3.70% after an initial pricing guidance of 4.00% area. This is the lowest coupon ever issued by the Republic to date on a global bond. The transaction is also the first sovereign USD bond issuance and the longest-dated USD bond issuance from Asia this year.
Order books were approximately USD 8.0 billion on the new cash component of the Global Bonds. By geographical allocation, 32% came from Asia, 51% from the U.S. and 17% from Europe.
Finance Secretary Cesar V. Purisima said, “The Republic’s stellar track record in executing liability management transactions underpins the Aquino administration’s firm commitment to proactive risk management. By leveraging on these opportunities to reduce high-coupon debt and to extend the maturity of our debt portfolio, the country achieves valuable savings that we can use to target broad-based and inclusive growth and development.”
Purisima noted that last year’s issuance was awarded both Best Philippines Deal and Best Sovereign Bond by FinanceAsia on 27 January 2015, underscoring the consistency of results that have transformed the Philippines into one of the region’s most resilient economies.
Proceeds of the issuance will be used to fund the Republic’s switch and tender offer, and related expenses while the remaining amounts will be used for general purposes, including budgetary support.
The tender offer exercise targeted existing bondholders to switch into the new Global Bonds. Bonds with a total notional value of USD 5.6 billion were submitted for the switch tender offer and the Republic accepted a market value of USD 1.5 billion from the submissions.
“We have been closely monitoring market conditions to ensure we can navigate against a challenging and volatile environment. The strong support that we received from our investors in this transaction is a sign of confidence on the reforms and strategies that the Republic has institutionalized.” commented Treasurer Roberto Tan.
Citigroup, Deutsche Bank, HSBC and Standard Chartered served as joint global coordinators and dealer managers for the transaction.
Citigroup, Credit Suisse, Deutsche Bank, HSBC, J.P. Morgan, Morgan Stanley, Standard Chartered Bank and UBS acted as joint bookrunners.
This press release is not an offer of securities for sale in the United States, and any securities offered in the United States may not be offered or sold in the United States absent registration or an exemption from registration. Any offering of securities by the Republic in the United States would be made by means of a prospectus, which would be obtainable from the Republic or the joint bookrunners and would contain detailed information about the Republic, including certain statistical information.
