By CHINO S. LEYCO
The Duterte administration completed its first offshore borrowing for the year by selling euro-denominated bonds that attracted foreign investors’ very favorable interest rates, the Department of Finance (DOF) announced yesterday.
The national government raised 1.2 billion euros (US$1.33 billion) from the overseas capital markets, Finance Secretary Carlos G. Dominguez III said, where Manila sold its first-ever zero coupon three-year euro-denominated bond and securing the lowest coupon ever for a nine-year deal.
Citing report from National Treasurer Rosalia de Leon, Dominguez said the three-year euro bond had a coupon of zero percent and offers 40 basis points over benchmark. The nine-year note’s 0.75 percent coupon, on there other hand, was tighter than on the Philippines’ existing euro bonds due 2027, which pay out 0.875 percent.
Dominguez said the overwhelming response from the market has underscored the international investors’ deepening confidence in the Philippine economy amid the reforms put in place by the Duterte administration.
“Credit must go to PRRD [President Rodrigo R. Duterte] for his unwavering support for the economic management team, the DOF, the Bureau of the Treasury professionals and our bankers,” Dominguez told reporters in a mobile phone message.
Proceeds of the bond sale will be used for the national government’s “purposes, including budgetary support.”
The three-year and nine-year issues, which follow a similar offering in May, were nearly four times oversubscribed, the finance chief also pointed out.
UBS, Citigroup, Standard Chartered, and Credit Suisse were joint lead managers and joint bookrunners. De Leon said the government sold 600 million euros each in three-year and nine-year Global bonds, while total tenders reached 5.5 billion euros, or an oversubscription of 4.3 billion euros. (With Reuters)