The Marcos administration completed its debut in the overseas debt markets that raised $2 billion in new borrowings, describing it as a vote of confidence by foreign investors in the new government, the Department of Finance (DOF) said.
The Bureau of the Treasury on Thursday, Oct. 6, concluded the National Government’s (NG) triple-tranche US dollar bond sale worth $2 billion or P117.21 billion from foreign commercial lenders.
Based on the Treasury report obtained by reporters, the NG sold $500 million worth of five-year bonds, $750 million of 10.5-year IOUs, and $750 million of 25-year green or sustainability bonds.
The five-year bonds were priced at 5.17 percent, while the 10.5-year notes carried a yield of 5.609 percent. The 25-year green bonds were priced at 6.1 percent.
In a statement, Finance Secretary Benjamin E. Diokno said the government was able to navigate volatile market conditions and has successfully completed the administration’s foray into the overseas debt markets.
“The strong demand for our first international bond offering under President Marcos’ administration demonstrates investor confidence in the new government and the administration’s six-year plan of economic transformation,” Diokno said.
National Treasurer Rosalia V. De Leon said the government plans to use the proceeds from the latest bond sale for general purposes, including budgetary support.
Proceeds from the 25-year green bonds will also finance or refinance assets under the Sustainable Finance Framework, De Leon added.
“The success of this transaction is an indication of the Philippines’ readiness to brave choppy waters in pursuit of excellent results,” De Leon said.
BofA Securities, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley, SMBC Nikko, Standard Chartered Bank and UBS acted as joint bookrunners for the transaction while Standard Chartered Bank and UBS acted as joint sustainability structuring banks.
Without providing the actual demand from investors, Finance Undersecretary Mark Dennis Joven said the Philippines received overwhelming interest across all tranches.
“The repeated successes of all international bond issuances by the Republic reflects the strong following from the global investor community for the Philippines and is a testament to the Republic’s robust credit profile and sound government finances,” Joven said.
Last March, the Duterte administration had also tapped the offshore debt markets with the same tenors of five years, 10.5 years and 25-years. The government raised $2.25 billion from that triple-tranche bond sale.
As of August 2022, total NG debt stood at P13.021 trillion.