/https://tf-cmsv2-smithsonianmag-media.s3.amazonaws.com/filer_public/54/66/546650fa-26a4-40fd-8d6d-5a7a04540f81/rosetta2.png)
.jpg)
format(webp))
format(webp))
Philippines Taps Global Markets with $3.29B Bond Sale
The Bureau of the Treasury (BTr) has successfully raised $3.3 billion through a dual-currency bond issuance, demonstrating strong investor confidence in the country's economic trajectory. The issuance included $2.25 billion from 10-year and 25-year U.S. dollar bonds and €1 billion ($1.04 billion) from a 7-year euro bond.
Sustainable Financing and Market Confidence
According to the BTr, the 25-year dollar bond and the 7-year euro bond were issued under the Sustainable Finance Framework, marking the Philippines’ first-ever euro sustainability bond and its return to the euro bond market since April 2021.
The pricing details of the bonds were as follows:
-
10-year U.S. dollar bond: Priced at T+90 basis points, narrowing by 30 basis points from the initial guidance of T+120 basis points.
-
25-year sustainability dollar bond: Set at 5.9%, lower than the initial estimate of around 6.1%.
-
7-year euro sustainability bond: Priced at mid-swaps plus 125 basis points, decreasing by 35 basis points from the initial guidance of mid-swaps plus 160 basis points.
“Despite market volatility, the success of this offering highlights the Republic’s ability to take advantage of favorable market conditions and execute a large-scale dual-currency transaction,” the BTr stated. It also noted that the strong demand and sustained orderbook growth across both U.S. dollar and euro markets reflect investor confidence in the country’s credit standing and long-term economic outlook.
Credit Ratings and Use of Proceeds
The bonds received positive credit ratings, with S&P Global Ratings assigning a BBB+ rating to the U.S. dollar bonds, while Fitch Ratings gave both the dollar and euro bonds a BBB rating, indicating good credit quality.
The proceeds from the bond issuance will be used to finance general budgetary needs and projects aligned with the country’s sustainability objectives.
Government Officials on the Issuance
National Treasurer Sharon Almanza emphasized the strategic timing of the issuance, stating, “With improving market conditions this week, we saw a strategic opportunity for the Republic to re-enter the capital markets. Our objective is to leverage current market momentum to secure optimal financing terms ahead of potential uncertainties. We appreciate the ongoing support of our investors.”
Finance Secretary Ralph Recto highlighted that the successful issuance reflects investor confidence in the country’s economic direction under the Marcos Jr. administration. “The success of this issuance demonstrates our ability to capitalize on favorable market conditions. It also highlights investor trust in the administration’s leadership and policies, as recognized by the market and reinforced by the country’s improving credit rating trajectory,” Recto said.
He further emphasized that the government’s commitment to strong investor relations is evident through regular engagement, including discussions at this year’s World Economic Forum (WEF) in Switzerland. “We have consistently communicated our strategies for achieving robust socioeconomic growth, which is why we remain confident that investors will continue to support the Philippine growth narrative,” Recto added.
The transaction is scheduled to be settled on February 4, further solidifying the Philippines' position in the global financial market.
What's Your Reaction?
