Philippines offers 10-yr benchmark global bond

Reuters

Posted at Jan 09 2014 11:31 AM | Updated as of Jan 10 2014 05:28 PM

MANILA (UPDATE) - The Philippines, one of Asia's most active sovereign bond issuers in the world debt market, has launched a 10-year benchmark global bond, with initial guidance putting the yield around 4.5 percent, sources close to the deal said on Thursday.

The global bond sale will be the country's first in more than a year. The Southeast Asian nation took advantage of strong liquidity in the domestic market last year and borrowed nearly all of its funding needs locally, a move aimed at also dampening the peso's strength in early 2013 on rising inflows after the country earned investment grade status from all three major credit rating agencies.

The Philippines last issued U.S. dollar-denominated bonds in November 2012 when it raised $500 million from issuing global bonds maturing 2023 to local investors, an issue that was three times oversubscribed.

Manila has pencilled-in foreign debt issues of $1 billion for this year's borrowing programme totalling 730 billion pesos ($16.3 billion) to bridge a budget gap seen at around 2 percent of gross domestic product.

Earlier, National Treasurer Rosalia De Leon said the Philippine government was studying debt market activity, including Sri Lanka's US$1 billion five-year global bond, before deciding on its sovereign debt issues this year.

Sri Lanka's global bond sale was more than three times oversubscribed.

Manila's global issue will fund prepayment of its foreign currency-denominated debt as well as budget support, according to the offer's term sheet.

Deutsche Bank, HSBC and Standard Chartered are global coordinators of the issue and are also joint bookrunners along with ANZ, Citigroup, Goldman Sachs, J.P. Morgan and Morgan Stanley.