By Chino S. Leyco
The Philippine government launched its latest offshore borrowing and liability management program yesterday.
In an announcement posted on its website, the Bureau of the Treasury said the Duterte administration will issue 10-year US-dollar debt notes to foreign investors.
National Treasurer Rosalia V. De Leon said the government will sell $2 billion worth of bonds, proceeds of which, will be used for budgetary support of the national government and debt swap.
“We will issue 10-year bond — $1 billion in new money and another $1 billion is for debt swap,” De Leon said in an interview.
Fitch Ratings announced it has assigned the Philippines’ forthcoming US dollar-denominated bonds an expected rating of “BBB(EXP).”
The expected rating is in line with the Philippines’ Long-Term Foreign-Currency Issuer Default Rating (IDR) of “BBB” with a Stable Outlook.
The Republic of the Philippines , rated Baa2/BBB/BBB, is marketing the US dollar benchmark bond at yield guidance of 3.30 percent area.
Half of the proceeds from the bond sale will be used to fund purchases of certain series of the country’s foreign currency-denominated bonds.
The Philippines has invited holders of specific dollar bonds, with maturities between January 2019 to January 2037, to tender them for cash in a one-day offer.
It has not disclosed the maximum amount of notes it plans to accept.
Citigroup and Standard Chartered are dealer managers for the tender.
Citigroup and Standard Chartered are also joint global coordinators for the new bond offering. The JGCs are bookrunners with Credit Suisse, Deutsche Bank, Morgan Stanley and UBS.
In December last year, Fitch Ratings upgraded the Philippines to “BBB” from “BBB–,” the agency’s first upgrade for the sovereign since 2014.