PH raises $500-M from 2023 global bond sale
MANILA - The Philippines raised $500 million from the sale of 2023 U.S. dollar-denominated bonds to local investors on Wednesday, part of government efforts to develop new funding sources to reduce reliance on foreign debt and dampen the peso's rapid rise.
Investor demand exceeded the issue size by more than three times, with total bids for dollar bonds on offer reaching $1.74 billion.
The onshore global bonds were sold at a coupon of 2.75 percent, the midpoint of Manila's indicative price guidance of 2.5 percent to 3 percent.
The Southeast Asian economy, one of the most prolific global bond issuers among emerging economies, wants to cut its dependence on foreign borrowing by pursuing debt buybacks, swaps and innovative deals such as local-currency denominated debt to better manage its debt load and win its first investment grade rating.
Manila will study the local market's ability to absorb dollar debt before issuing more global bonds onshore, National Treasurer Rosalia de Leon told reporters.
The government wants to create more demand locally for dollars and help the central bank manage the rapid appreciation of the peso, Asia's best performing currency this year with gains of around 7 percent.
The government has also said it plans to borrow more from the local market and cut its overseas debt sales in 2013 to a range of $1.5 billion to $2 billion from an original program of $3 billion.
It plans to source more dollars from the central bank's record high reserves to pay off its foreign debt.
Manila bought at least $750 million this year from the central bank's reserves to repay part of a $1.5 billion debt buy-back program early this month.
The other half of the debt buy-back was financed via its $750 million 10-year global peso note issue, which attracted bids nearly 8 times the issue size at a yield lower than initial guidance.
Last month, Moody's Investors Service upgraded the country's ratings to one notch below investment grade, matching those of rivals Standard & Poor's and Fitch ratings.