PH has lowest coupon level


The Philippines got the lowest coupon ever after raising $2.75 billion from the global bond market, according to Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno.

“The Philippines set a record for lowest coupon levels,” said Diokno on Thursday.

The ROPs sold have maturities of 10.5 years and 25 years at 1.648 percent and 2.65 percent versus the government’s issuance in April which fetched 2.46 percent and 2.95 percent.

A report disclosed by Diokno said that the Philippines “once again set the record for the lowest coupon levels that the ROP has achieved in the US dollar bond market” with an orderbook size that peaked at $8 billion.

“We also pierced our dollar curve by issuing with around -5 bps (basis points) new issue premium for both tranches,” according to the report. The 10.5-year bond had a spread of +70 bps and the 25-year was priced around +96 bps above comparable US Treasuries.

The latest ROP sale also attracted new investors with “sizeable participation from real money accounts.” This include Cathay Life of Taiwan, Fukoku Mutual Life of Japan and Washington State Investment Board.

The Philippine spreads for this deal, said the report, are “well above the levels” from that of Indonesia’s 10-year and 30-year coupons and spreads, and also the 10-year and 30-year spreads of “A-rated” Peru. Indonesia's 10-year and 30-year bonds are priced at 3.85 percent and 4.20 percent with current spreads at 104 bps and 145 bps. Peru, in the meantime and in the same tenor has spreads of 83 bps and 114 bps.

In April this year, the government also sold $2.35 billion ROPs.