The Philippine government sold its second “green” bonds, this time in the Japanese debt market through a four-tranche yen-denominated offering, the Bureau of the Treasury announced on Wednesday, April 13.
The bureau said the government raised ¥70.1 billion, roughly P28.95 billion, via a five-year, seven-year, 10-year, and 20-year Samurai bond sale. The offering has an Environmental, Social, and Governance (ESG) label.
The green Samurai bond, the first-ever ASEAN Sustainability debt transaction in Japan, follows the Philippines’ 25-year green bond insurance last March in the US debt market.
The P28.9 billion Samurai bond is composed of five-year note raised ¥52 billion, (P21.5 billion) priced at 0.76 percent coupon, while a seven-year debt raised ¥5 billion (P2 billion) at 0.95 percent. Meanwhile, the 10-year bond issue generated ¥7.1 billion (P2.9 billion) at 1.22 percent coupon, and a 20-year tranche raised ¥6 billion (P2.5 billion) at 1.83 percent coupon.
In a statement, Finance Secretary Carlos G. Dominguez said the government’s latest issuance has exhibited investor appetite despite the current market volatilities.
“This is testament to the international appreciation of, and confidence in, the government's strong commitment to climate change mitigation and adaptation initiatives and to deepening its domestic sustainable finance market,” Dominguez said.
The offering also underscored the continued support of the international investor community for the country’s sustainability initiatives, particularly on efforts to mobilize capital from ESG-conscious investors, the finance chief said.
Meanwhile, Finance Undersecretary Mark Dennis Joven said the maiden issuance of sustainability bonds in the Japanese market showed the ever-growing investor confidence in the Philippines and its commitment to advance green and social initiatives.
"The transaction also marks the first long-tenor Samurai offering of the Republic,” Joven said.
For her part, National Treasurer Rosalia V. De Leon said, “Amid market volatility and rising geopolitical tensions, this landmark Samurai transaction has demonstrated the Republic’s ability to price tighter than current secondary levels and extend the maturity to the long-end of the curve.”
“The upsized transaction supported by new investors from Japanese regional banks and life insurance companies highlights the Republic’s strong credit profile in the global capital markets,” de Leon said.
SMBC Nikko Securities Inc. and Mitsubishi UFJ Morgan Stanley Securities Co., Ltd acted as lead managers for the offering.