PHL starts domestic debt swap, eyes issuance of at least P60B new securities

MANILA, Aug 6 (PNA) — The Bureau of the Treasury (BTr) on Wednesday announced the government’s offer to swap government securities maturing from September 2014 until June 2024.

In a statement, the BTr said the debt exchange activity will start August 6 and last until August 15, 2014.

”The transaction forms part of the Government’s program to manage its liabilities, directed to rebalance its domestic debt portfolios, foster efficient pricing of Government Securities and enhance market traders for the Government’s domestic –issued instruments,” it said.

Interested security holders will be allowed to swap the debt papers for a fresh 10-year bond, which has a minimum coupon rate of four percent.

Relatively, the said freshly-issued bond can be purchased without necessary exchanging it with still-active securities.

The government targets to issue at least P60 billion-worth of the said debt instrument.

”The proceeds from the sale of new benchmark bonds will be primarily used to settle accrued interests payable to bondholders of accepted eligible bond in the exchange component and other transaction related expenses,” the statement said.

National Treasurer Rosalia de Leon said “the transaction is part of the Republic’s ongoing commitment to pro-actively manage the Government’s debt portfolio.”

”This will also provide an opportunity for existing GS (government security) investors to exchange their illiquid bonds and receive benchmark bonds with will trade more efficiently in the market,” she added.

The government tapped HSBC and the Land Bank of the Philippines as joint global coordinators for the debt swap while BDO Capital & Investment Corporation, BPI Capital Corporation, Development Bank of the Philippines (DBP), and First Metro Investment Corporation will serve as join deal managers.

The Aquino administration has been actively doing liability management program to lengthen the maturities of government securities and improve its debt profile. (PNA)