PHL raises 92 billion yen from samurai bonds

By Karl Angelo N. Vidal, Reporter

THE Philippines raised ¥92 billion ($860 million or P44.3 billion) from the sale of ”samurai” bonds across four tenors, amid strong demand from investors.

According to a report from IFR, the government sold ¥30.4 billion in three-year bonds, carrying a coupon rate of 0.18%. The bonds were sold 23 basis points (bp) above the benchmark rate.

Another ¥21 billion was also raised via five-year papers with a coupon of 0.28% and 33 bps above benchmark. The state also sold ¥17.9-billion seven-year debt at a 0.43% coupon rate and a spread of 45 bps above benchmark.

Meanwhile, ¥22.7 billion was generated through a 10-year bond offer. This was priced at 0.59% and 53 bps above benchmark.

S&P Global Ratings assigned a “BBB+” long-term foreign currency rating to the yen-denominated senior unsecured notes issued by the Philippine government.

National Treasurer Rosalia V. De Leon said the government saw strong demand for the samurai bonds, prompting them to upsize the offer from the $750 million it announced previously.

“We have a strong book. We have more than $1 billion, but we decided to take only ($860) million,” Ms. De Leon told BusinessWorld in a phone interview on Friday.

“We intended to offer only $750 million, but because of the strong reception and to show appreciation to our investor for the good pricing… and we have new investors who also participated, we decided to increase the volume,” she added.

The Treasury tapped Daiwa, Mitsubishi UFJ Morgan Stanley, Mizuho, Nomura and SMBC Nikko to serve as the transaction’s lead managers.

The amount raised was smaller than the ¥154.2 billion ($1.39 billion) worth of “samurai” debt papers it issued in August 2018 in three-, five- and 10-year tenors, fetching 0.38%, 0.54% and 0.99% coupons, respectively.

The Philippines, one of Asia’s most active sovereign bond issuers, plans to borrow P1.189 trillion this year. Documents from the latest Development Budget Coordination Committee meeting showed that 73% of total borrowings will be sourced domestically, while the balance will be from foreign creditors.

This will be used to fund a budget deficit programmed at P624.4 billion, equivalent to 3.2% of gross domestic product, and support increased government spending programmed at P3.774 trillion.

The government returned to offshore market twice in May, raising €750 million ($842.33 million) in eight-year global bonds, as well as 2.5 billion renminbi ($363.3 million) in three-year “panda” bonds.

In January, the Philippines also sold $1.5 billion in 10-year offshore dollar bonds.

Ms. De Leon said the Japanese bonds will be settled on Aug. 15.