Philippines peso bond swap draws strong demand


Posted at Aug 15 2014 05:36 PM | Updated as of Aug 16 2014 01:36 AM

MANILA - The Philippines has so far received offers of more than P140 billion ($3.21 billion) for its new 2024 bonds, part of a domestic debt swap aimed at lengthening the government's debt maturity profile, an official at one of the six underwriters said on Friday.

Apart from over P140 billion worth of local bonds submitted under the debt exchange program, Manila has so far obtained bids of P20 billion for the sale of new 10-yr bonds, Roberto Juanchito Dispo, president of First Metro Investment Corp said.

Proceeds from the sale will be used to pay accrued interest on the bonds which will be exchanged for the new 2024 bonds, according to the Bureau of Treasury.

The offer period for the government's bond swap program will end on Friday. The coupon rate for the new bonds will be announced on August 19, and settlement is on August 20.

P2 trillion worth of government securities maturing between September 2014 to June 2024 were eligible to participate in the swap.

Manila's last domestic bond exchange was in July 2011, when a record P323.5 billion of new 2022 and 2031 bonds were issued. The debt exchange extended the average maturity of the local bonds swapped to 18 years from about 5.5 years.

The other banks mandated to handle the deal were state-run Land Bank of Philippines and Development Bank of the Philippines, BDO Capital and Investment Corporation, BPI Capital Corp and HSBC.