The Philippines forays into its first foreign bond issuance this year as it launches its multi-tranche dollar denominated offering.
According to a document shared with reporters yesterday, the triple-tranche offering will have 5.5-year, 10.5-year and 25-year tenors.
The issue size is based on US dollar benchmark, or at least $500 million.
Use of proceeds from the issuance will be for general budget financing, while the 25-year sustainability bond will also be used to “finance/refinance assets in line with the republic’s sustainable finance framework.”
The initial price guidance for the 5.5-year bonds is 155 basis points (bps) over Treasuries area, for the 10.5-year it will be 195 bps over area, while for the 25-year IOUs, around the 5.95 percent area.
Joint lead managers and bookrunners are BofA Securities, Deutsche Bank, Goldman Sachs, HSBC (B&D), Morgan Stanley, Standard Chartered Bank and UBS.
In October last year, the government raised $2 billion, also from its US dollar-denominated triple-tenor bond offering.
The five- and 10.5-year tranches were then priced at US Treasury plus 120 and 185 bps with a coupon of 5.17 percent and 5.609 percent, respectively, 35 bps tighter than an initial pricing guidance of US Treasury plus 155 and 220 bps area, respectively.
The 25-year sustainability tranche was priced at 6.1 percent with a coupon of 5.95 percent, 45 bps tighter than initial pricing guidance of 6.55 percent area.
Meanwhile, on the domestic side, results were mixed in yesterday’s treasury bills auction as the Bureau of the Treasury (BTr) decided to fully award bids for the 91- and 182- day IOUs while partially awarding the 364-day security.
The 91- and 182-day papers fetched average rates of 4.232 percent and 4.959 percent, respectively.
The one-year treasury bill was capped at an average rate of 5.393 percent.
The auction was 1.9 times oversubscribed, with total tenders reaching P28 billion. With its decision, the BTr raised P14.8 billion of the P15 offering.
