Philippines plans $1-billion samurai bond sale
MANILA, Philippines – The government is planning to issue samurai bonds amounting to $1 billion this year, Finance Secretary Carlos Dominguez III said in front of businessmen in Tokyo, Japan on Tuesday, June 19.
The plan comes after the government's issuance of $2 billion worth of one-year dollar denominated bonds in January and the maiden Panda bond float of RMB1.5 billion in March. The bonds' spread were 37.8 and 35 basis points (bps) over the US treasuries, respectively. (READ: PH, Bank of China seal deal for $200-M 'Panda bond' offering)
Dominguez said the tight spreads "indicate confidence in the fiscal and debt management of the Duterte administration."
A samurai bond is a type of foreign bond which grants the government access to capital markets in Tokyo to raise capital.
Samurai bonds give the government an opportunity to expand into the Japanese market without the currency risks associated with foreign investments since the bonds are issued in yen.
Because samurai bonds are yen-denominated, Japanese investors view them as an attractive investment security.
The Department of Finance (DOF) said Dominguez gave no other details on the planned samurai bond float. He previously stated that it would proceed sometime in the 3rd or 4th quarter of the year.
National Treasurer Rosalia de Leon also echoed Dominguez's statement.
The government has already tapped 6 Japanese banks for the planned issuance.
The samurai bonds may also be used to finance the government's Build, Build, Build program. (READ: Duterte administration details 'ambitious' infra plan)
Japan has supported at least 3 infrastructure projects – the Cavite Industrial Area Flood Risk Management Project, the Arterial Road Bypass Project Phase III, and the first phase of the Metro Manila Subway Project.
Japan has also formalized loans and grants amounting to $1.25 billion. – Rappler.com