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October 06, 2022

Government sells $2.25 billion global bonds

The Philippines sold $2.25 billion worth of bonds in the global debt market on Tuesday at prices better than originally indicated by investors.

In the case of the 5-year global bond, it was priced at a 90 basis-point spread against the US Treasury rate and mean paying investors 3.29 percent as coupon. Initial guidance indicated a higher price of 125 basis-points.

The 10-year global bond was priced at 125 basis-points, which meant paying bondholders 3.556 percent although the initial guidance was 165 basis-points.

Proceeds from the 5- and 10-year bonds were earlier designated to boost the nation’s budget this year.

As for the 25-year tranche sold at today’s exercises, the bonds were priced at 4.200 percent or 50 basis-points tighter than initial guidance of 4.700 percent. Proceeds from this particular tranche have been earmarked for the country’s climate-related projects and programs.

The credit watcher Moody’s Investor Service earlier rated this particular issuance a Baa2, its ninth highest indicating moderate risk to investors. Standard and Poor’s was seen rating the bonds BBB+ and Fitch Ratings a BBB, all indicating the investment quality of the bonds.

The Philippines sold $3 billion dual tranche global bond offering in June last year, as well as the 2.1-billion Euro triple-tranche global bonds in April last year and the 55 billion Yen samurai bond sale a month earlier.

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