PH raises €750M debt from euro bond sale

enablePagination: false
maxItemsPerPage: 10
totalITemsFound:
maxPaginationLinks: 10
maxPossiblePages:
startIndex:
endIndex:

Metro Manila (CNN Philippines, May 10) — The Philippines raised €750 million (about ₱44 billion) in its fresh foray in the global market which targeted European investors.

The Bureau of the Treasury reported strong demand for the eight-year global bonds offered this month, which marked the country's return to the European capital markets in over a decade.

The government last issued euro bonds in 2006 worth €500 million.

The Philippines borrows from both local and foreign sources to finance its spending plans and grow the economy. The Duterte administration has been actively tapping unexplored markets abroad to tap multiple funding sources.

"The successful transaction allowed us to diversify our funding program to support productive spending for infrastructure and social services," National Treasurer Rosalia De Leon said in a statement.

Prior to the euro bond sale, the Philippines floated renminbi- and yen-denominated securities to mark their return to the Chines and Japanese markets last year.

The bureau said the bonds received "overwhelming support" among investors, which drove interest rates lower. Authorities took advantage and accepted more bids beyond the €500 million which the government wanted to raise. The notes fetched a coupon rate of 0.875 percent, while demand hit close to €3 billion, De Leon said.

Deutsche Bank and UBS were chosen as joint global coordinators, while BNP Paribas, Credit Suisse, and Standard Chartered Bank stood as joint bookrunners for the transaction.

Chris Nelson, chairman of the British Chamber of Commerce of the Philippines, said growing interest in the Philippines drove European investors scrambling to get hold of these global bonds.

"First, the Philippine story is getting much better known in Europe. Second, if you look at Europe, we have our own challenges," Nelson told CNN Philippines. "Europe as a whole is not growing, and therefore they are looking for opportunities and European investors are seeing opportunities in the Philippines."

Nelson added that Europeans are in search for better yields, and a fast-growing economy like the Philippines looks attractive.

International debt watchers vouched for these government-issued bonds, which came following a credit upgrade given by S&P Global Ratings in April. Philippine officials were then conducting a roadshow before investors in Zurich, London, Paris, Frankfurt and Milan.

The bonds must be settled by May 17, and will be due by 2027.