THE Bureau of the Treasury could offer all its offshore bond issuances within the first half of the year after successfully securing all the necessary approvals, a top official said.

Deputy Treasurer Erwin D. Sta. Ana said on Tuesday that the Treasury has already received the needed approvals for all their commercial issuances in the international capital markets.

Aside from the euro-denominated issuance that was announced on Monday, Mr. Sta. Ana said they will likely tap other bond markets, with dollar, panda and samurai bonds also on the table.

Asked if all offshore issuances will be done within the first semester, he said “that’s a strategy that we are actually forming at this time… That’s a possibility…but that remains subject to market conditions, of course.”

However, the Treasury has yet to set a timetable for all of its offshore issuances, including the euro-denominated bonds.

“It’s really more on whether it’s opportunistic for us to actually go out. We’re ready anytime,” Mr. Sta. Ana told reporters.

For the dollar-denominated bond offer, he said they can issue these papers “back-to-back” with the euro bonds, but they are still coordinating with Finance Secretary Carlos G. Dominguez III on the matter.

“We can do some sort of a back-to-back, also just do a wait-and-see or monitor the US market some more. There have been lots of issuances in that space so we’ll see from a supply perspective whether it’s time to go. So it’s really more of timing now,” he said.

Meanwhile, he said that they are considering returning to the samurai debt market since the bonds they issued back in 2010 will mature this year.

Sought for comment, a bond trader said offshore bond issuances should be launched as early as possible “because rates are not coming back to where it was a month ago given the developments.”

EURO BONDS
Meanwhile, Mr. Sta. Ana said they still need to determine the size of its planned euro bond issuance but based on initial feedback, there are more interested investors for the three-year and nine-year tenors.

“Based on the initial feedback, I think there are a group of investors that are more leaning towards the three, and there is a more mainstream kind of fund investor group in the nine-year (tenor),” Mr. Sta. Ana said.

Mr. Sta. Ana said the volume size will be based on the order book they will receive but they are still planning to do a benchmark size issue, which is around $500 million or $1 billion for the two tenors.

“At the minimum, if you look at benchmark size for ($500 million) each, yes, ($1 billion). We also can upsize if there’s ample demand. So that’s left to be seen,” he added.

“Actually we had successful calls with select investors and updates from the banks indicate good, well, a highly successful initial feedback from investors, not only in Europe, but also in Asia. So, we have seen a diverse order book so far. Although, that’s just initial expressions of interest. So we will decide later this afternoon whether we are issuing or we are really executing the trading within the day,” he said on Tuesday.

Moody’s Investors Service on Tuesday assigned Baa2 senior unsecured ratings for the euro-denominated dual-tranche bond offerings, which mirrors the country’s sovereign credit rating.

On Monday, S&P Global Ratings assigned a BBB+ rating to the proposed issuance, while Fitch Ratings gave it an expected rating of BBB, also at par with their ratings on the Philippines.

UBS, Citigroup, Standard Chartered Bank, and Credit Suisse will be the joint lead managers and joint bookrunners for the transaction, Reuters said on Monday.

The government returned to the European market in May last year after 13 years, raising €750 million ($852 million) via an offer of eight-year euro bonds, which carry a coupon rate of 0.875%.

The Treasury is programmed to borrow $3.7 billion from external sources this year. This will help finance the government’s P4.1-trillion budget this year, which is 12% higher than last year’s spending plan. — Beatrice M. Laforga

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