Gov’t launches $500-M bonds

Data from the Bureau of the Treasury data showed Wednesday that the government is returning to the overseas debt markets to borrow at least $500 million for budgetary support, signifying President Ferdinand Marcos Jr.’s foray into foreign commercial borrowing.

The Marcos administration launched a three-tranche, benchmark-sized US dollar-denominated bonds with tenures of five years, 10.5 years, and 25 years, data show.

The document showed that initial price guidance for the five-year note is set at 155 basis points over Treasuries area, while the 10.5-year paper is at 220 basis points over Treasuries area and the 25-year bond at the 6.550 percent area.

Proceeds from the five-year and 10.5-year debt papers will be used for “general budget financing” while the 25-year IOU is “to finance/refinance assets in line with the Republic’s Sustainable Finance Framework.”

For the latest offering, BofA Securities, Goldman Sachs, HSBC (B&D), J.P. Morgan, Morgan Stanley, SMBC Nikko, Standard Chartered Bank and UBS are joint book runners.

P2.2-T borrowing

For 2022, the Marcos administration plans to borrow P2.2 trillion to support the country’s economic recovery. The bulk of these borrowings will be drawn from domestic creditors.

The total national government debt in September stood at P13.021 trillion as of August, an increase of 12 percent or P1.379 trillion from P11.642 trillion a year ago, data from BTr shows.

Also in September, the country raised P420.4 billion ($7.4 billion) from the first local-currency bond sale to retail investors since Mr. Marcos became president.

Tapping into the popularity of securities, which offer a higher return than bank deposits, the government obtained about 17 percent of its planned borrowings for this year from offering. Treasurer Rosalia de Leon told reporters she was “very” happy with the result.

In March, the Duterte administration also tapped offshore debt markets with the same tenors of five years, 10.5 years, and 25 years. The government raised $2.25 billion from that triple-tranche bond sale.

Leave a Reply

Your email address will not be published. Required fields are marked *