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October 01, 2022

Manila sells samurai bonds worth 70.1B yen

The government on Wednesday marked its return to the samurai debt market as successful with the sale of multi-tranche bonds worth 70.1 billion yen.

The debut ASEAN Sustainability bond transaction comes on the heels of a similarly successful 25-year bond sale just weeks earlier in the US dollar bond market.

According to the Bureau of Treasury (BTr), the samurai bonds were issued in 5-, 7-, 10- and 20-year tranches that had to be upsized to 70.1 billion yen due to demand.

“The Republic was able to achieve a benchmark size for the transaction despite having the 5-year as the shortest tenor and the tighter pricing compared to secondary levels. The Republic also utilized demand in the long-end by issuing its first 20-year note in the Samurai market,” the BTr said.

It noted the yen bond sale captured new investor accounts and demand even in the midst of a still volatile market.

Bondholders for the 5-year tranche will receive 0.76 percent as coupon rate of their investment and 0.95 percent for the 7-year bonds.

The 10-year bond holders will be paid 1.22 percent coupon rate while the 20-year bondholders, an inaugural issue for the Republic of the Philippines in this case, will be paid a 1.83 percent coupon.

The BTr acknowledged the coupon rates represent a tightening or less expensive funds for the government than earlier samurai debt exercises as so-called spreads in this case narrowed by 60 basis points for the 5-year tranche, 70 basis points for the 7-year bonds, 85 basis points for the 10-year bonds and115 basis points for the 20-year tenor.

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