PHL government to issue P140.4B 10-yr bond vis-à-vis debt swap, sale of new bond

By Joann Santiago

MANILA, Aug 19 (PNA) — The Philippine government on Tuesday said it will issue a total of P140.39 billion worth of 10-year bond in line with its latest bond exchange program and the sale of new bonds.

In a statement, the Bureau of the Treasury (BTr) said it will issue on Wednesday about P130.99 billion worth of new bonds due 2014 in exchange for the P121.72 billion worth of previously-issued securities offered for exchange.

The bond has a coupon rate of 4.125 percent.

Relatively, the government will issue P9.49 billion worth of bond with the same tenor and yield after it offered the same securities for sale during the debt exchange.

Total eligible bonds offered for exchange during the exercise amounted to P201.03 billion while tenders for the new bonds reached P39.46 billion.

The BTr said the government saved about P1.31 billion in interest expense in the first year of the bond issuance.

These savings, it said, “can be used by the Government for initiatives that will help sustain and maintain the country’s continues growth.”

This is the seventh liability management exercise of the government in the last five years and it is being done to lengthen maturities of its liabilities and improve the government’s debt profile.

National Treasurer Rosalia de Leon said they “are pleased with the support that the investors have shown in this transaction, which helped the government achieve multiple objectives.”

”Our collaborative efforts have given us the opportunity to realize cost-competitive funding and improve our debt portfolio,” she added.

Relatively, Finance Secretary Cesar Purisima vowed to continue “to actively engage the markets and provide innovative solutions that are relevant to our investors.”

”This domestic liability management exercise gave our investors the avenue to exchange illiquid bonds with new benchmark bonds which will trade more efficiently in the debt markets,” he added.

HSBC and Land Bank of the Philippines (Landbank) served as joint global coordinators and joint dealer managers for the issuance.

BDO Capital & Investment Corp, BPI Capital Corporation, Development Bank of the Philippines (DBP) and First Metro Investment Corporation (FMIC) also serviced as dealer managers.

HSBC Philippines President and CEO Wick Veloso congratulated the government for the success of the liability exchange.

He said this exercise “helps improve the way the Philippines is managing its debt in the years to come.”

”The Bureau of the Treasury listened well to institutional partners and investors. The BTr provided a window for investors to exchange illiquid and inefficient bonds into a liquid and fairly priced new 10-year bond,” he added. (PNA)