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Banks eye global bond offer

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(Files) Finance Secretary Carlos Dominguez III speaks during the DuterteNomics Forum in Pasay City on April 18, 2017. -- PRESIDENTIAL COMMUNICATIONS

INTERNATIONAL BANKS have expressed interest in participating in the Philippines’ planned global bond issuance early next year, the Finance chief said, as the government readies its offer.

“They have been already doing the rounds, both the BTr (Bureau of the Treasury) and BSP (Bangko Sentral ng Pilipinas). I forgot the number of banks now, but they have also been talking to the brokers, both East coast and West coast. We are having so many offers right now…another European bank just came to us. So looks like we are, if not flavor of the month, flavor of the quarter. Ang daming offer (There are many offers),” Finance Secretary Carlos G. Dominguez III told reporters on Thursday.

The official said the government plans to issue $1-billion dollar-denominated debt instruments “early next year.”

Mr. Dominguez said the offer would be a combination of both swap agreements and new money.

However, Deputy Treasurer Erwin D. Sta. Ana said the terms of the sale are still in discussion.

“At this stage we are still looking at some proposal and some available structures so we haven’t really started,” he said, noting that they are “closely monitoring the markets,” given the high probability of a December rate hike from the US Federal Reserve.




“We are still undergoing the usual approvals and securing those approvals. We have to content with the US SEC (Securities and Exchange Commission) again. We would have to wait for those to come to fruition,” Mr. Sta. Ana said.

Last January the government embarked on a $2-billion 25-year bond deal, raising $500 million in new money and switching some $1.5 billion to lengthen maturities.

Aside from the planned dollar bonds, the government’s yen-denominated papers or samurai bonds are also attracting interest.

“So both from the banks and investors side, we were receiving positive feedback for an issuance,” said Mr. Sta Ana, with the offer eyed also next year.

This is aside from the yuan-denominated bond offer set in the first quarter of next year, which was also met with great interest from Chinese banks and investors following a non-deal road show in September.

The government plans to borrow P888.227 billion in 2018, with 20% or P176.269 billion of the amount sourced from foreign markets. — E.J.C. Tubayan

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