P122B raised from euro bond offer

THE government has returned to the international market for the second time this year by raising 2.1-billion euros (P122 billion) from its latest triple-tranche bond offering, which will be used for budgetary support.

In a statement on Thursday, National Treasurer Rosalia de Leon said the total amount raised from the euro bond offering was composed of 650 million euros for the four-year tenor, 650 million euros for the 12-year tenor, and 800 million euros for the 20-year tenor.

According to the Bureau of the Treasury (BTr), all tranches tightened by 25 basis points from the initial price guidance backed by a strong order book, which allowed the government to revise its price guidance twice across all three tranches.

The transaction also marks the largest euro transaction and the first triple-tranche euro offering from the government. The 20-year bonds also represent the government’s longest ever euro tenor and largest individual euro tranche, it added.

The BTr said the transaction is expected to settle on Wednesday, April 28, 2021.

“Proceeds of the issuance will be for the Republic’s general purposes, including budgetary support,” it noted.

BNP Paribas, Credit Suisse, Goldman Sachs, J.P. Morgan, Nomura and Standard Chartered Bank acted as joint lead managers and joint bookrunners for the transaction.

Finance Secretary Carlos Dominguez 3rd was quoted as saying that “the Philippines’ successful return to the international capital market for the second time this year reflects the investor community’s confidence in the country’s prospects for a strong recovery from the prolonged pandemic, given that its financial readiness has allowed the government to do whatever Covid-19 (coronavirus disease 2019) response measures are necessary to save lives and revive the economy.”

National Treasurer de Leon, for her part, said, “The success of this euro deal, being already our fourth offering since the pandemic, serves as affirmation that we are on track to emerge from this crisis as a stronger and more resilient economy. Further, the ability to stretch our maturities to the 20-year tenor at tight pricing underscores that investors are indeed taking a long view on our return prospects.”

In January last year, the national government was able to raise 1.2 billion euros from its last double-tranched euro bond offering.

The amount generated — about $1.33 billion, or P67.68 billion — was an upsize of the initial 500-million-euro benchmark offering for each tenor. Oversubscription peaked at 3.58 times, or more than 4.3 billion euros.