After the landmark issuance of its 10-year Global Peso Notes in September, the Republic of the Philippines again successfully issued its debut offering of its 25-year Global Peso benchmark notes. At 6.25%, the bonds were priced inside the domestic yield curve, representing a 23 percent discount from Treasury bond of comparable maturity.
Even with its long duration, the transaction was oversubscribed more than three times, generating orders from 165 high quality accounts and garnered the largest participation from offshore accounts so far in a recent Philippine bond issue.
The issuance posted several milestones including being the first ever long dated Global Local Currency deal from Asia, the largest long-dated Asian bond issue in any currency over the past five years and the lowest coupon ever achieved by the Republic on a long-dated bond issue.
Consistent with its track record, the excellent timing of the deal allowed the Republic to upsize the issue to $1.25 billion and execute at the tight end of the price guidance to bring down its overall borrowing costs and extend average maturity. Proceeds from the offering will be used to pay more expensive and shorter-dated 8.375% seven-year dollar obligations to mature this February. The strong reception demonstrates that investors are taking a strong position on the country’s sustained higher growth prospects and expectations on currency appreciation and augurs well in providing participants in the Government’s public-private sector partnership program ready access to cheaper long-term local currency funding for much needed infrastructure projects.