'Govt in talks with banks on foreign debt swap'


Posted at Jul 18 2011 04:29 PM | Updated as of Jul 19 2011 05:56 AM

MANILA, Philippines - The government is in talks with a shortlist of six banks for a planned foreign debt swap, days after the Southeast Asian country closed a record domestic debt exchange, a government source said on Monday.

The shortlisted banks are Citigroup, JP Morgan, Goldman Sachs, HSBC, Standard Chartered Bank, and UBS, said the source, who declined to be named as the debt swap talks were in the initial stages.

Except for Standard Chartered, all the banks were bookrunners for the Philippines' $1.5 billion global bond sale in March.

The government has been using debt swaps to stretch the average maturity of its outstanding bonds.

Finance Secretary Cesar Purisima said this month the Philippines, one of the most active issuers of sovereign foreign debt in Asia, may launch another foreign debt swap if it would help the government manage its liabilities better.

The Philippines last swapped foreign debt in September, when it issued $3.19 billion of new 2021 US dollar bonds and reopened 2034 US dollar bonds to replace shorter-dated paper.

Last week, the government issued new 2022 and 2031 bonds in a record $7.5 billion local debt swap, with the debt exchange extending the average maturity of local bonds swapped to 18 years from about 5.5 years.