$500M In New Bonds Sold By PH Gov’t To Fund Duterte Infra Projects

Philippine Government Sold $500 In New Bonds To Support Duterte’s Infrastructure Projects

$500 million in new bonds was sold by the Philippine government to fund the infrastructure projects of President Rodrigo Duterte.

On Thursday (January 19, 2017), the Bureau of the Treasure stated that the $500 million in 25-years bonds up to 2042 were sold at a coupon of 3.7 percent, which is below the initial pricing guidance of 3.95 percent.

The Treasury also explained that the track record of Duterte administration could remain strong if they could mark the first international capital markets, which can extend its excellent record on liability management transactions.

Projects

$4.5 billion in tenders was the total global bond sale were attracted. 24 percent of the sales came from the United States, 33 percent from Asia, and 43 percent from Europe.

“With this transaction, the Republic has extended its excellent track record in executing liability management transactions. The tight pricing, we achieved on the new 25-year bond offering, we believe, underscores the confidence of global investors in the Duterte administration,” said by Finance Secretary Carlos G. Dominguez III quoted by Inquirer.

The treasury said that the amount obtained from the offshore bond issuance will be used to support the government’s budget.  The $1.5 billion for bonds will grow between 2019 to 2037, which could reach up to $3. 52 billion.

Projects

National Treasurer Roberto B. Tan said that the Philippines could get benefits when the Republic will achieve the significant cost saving if allowed by liability management exercise.

Tan also said that they have managed earn the investor’s support despite the vitality in global markets. They are also hoping that the country’s economy could immediately recover through execution of strategies and reforms by Duterte administration.

Deutsche Bank, Standard Chartered Bank, UBS, Citigroup, and Credit Suisse were the groups that will act as book runners, dealer managers, and joint global coordinators, according to the Treasury.

P860.7 billion worth of gross domestic product (GDP) was planning to spend by Duterte administration on hard infrastructure projects.

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