The Duterte administration has “successfully” completed its three-tranche foreign commercial borrowing on the back of volatile financial markets overseas, the Bureau of the Treasury announced.
The Treasury bureau said Tuesday, March 22, that the government raised $2.25 billion, or roughly P118 billion, through the sale global bonds, including $1 billion from the maiden green bond issuance.
Aside from the 25-year green bond, the US dollar-denominated note offering also comprises $500 million worth of five-year bonds and $750 million in 10.5-year bonds.
The five-year bond was priced at 3.229 percent, or a spread of 90 basis points over Treasuries, while the 10.5 note at 3.556 percent or 125 basis points over Treasuries, and 4.2 percent for the 25-year IOUs, 50 basis points tighter than the initial guidance of 4.7 percent.
The deal follows the $3 billion dual tranche global bond offering in June last year, as well as the 2.1 billion euro triple tranche global bonds and 55 billion yen Samurai bond offering in April and March, respectively.
Proceeds of the five-year and 10.5-year Global Bonds will be for the government’s general purposes, including budgetary support, the treasury said.
On the other hand, the proceeds from the 25-year green bonds will be for budget financing and to finance and refinance assets in line with the country’s sustainable finance framework, the Treasury added.
Finance Undersecretary Mark Dennis Y.C. Joven said the successful transaction is a testament to the Philippines’ strong economic fundamentals and the confidence of the investor community in the country’s long term growth trajectory.
“Despite volatility in the global markets, we have received overwhelming interest across all tranches, and especially on our first sovereign ESG bond issuance,” Joven said.
“The upsized issuance backed by a significantly oversized orderbook provides an overwhelming affirmation to the administration’s continued prudent fiscal and economic management amidst the pandemic,” he added.
Meanwhile, National Treasurer Rosalia de Leon said the strong investor reception across all tranches underscores the country’s unfettered access to the international capital markets.
“Being the first and largest offshore Southeast Asia sovereign offering in 2022, the Republic’s transaction has reopened the Asian bond markets for long-dated offerings and cements the Republic’s position as the leading capital market participant in Asia,” de Leon said.