Marcos Jr. administration

Philippines borrows $3 billion in triple-tranche bond offering

Ralf Rivas
Philippines borrows $3 billion in triple-tranche bond offering

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The Bureau of the Treasury says strong demand helped lower interest rates

MANILA, Philippines – The Marcos administration borrowed $3 billion (around P165 billion) through a triple-tranche fixed rate global bonds offering, proceeds of which will mainly be for government budgetary support.

The final rates of the dollar-denominated offering are as follows:

  • $500 million- 5.5 years at 4.625%
  • $1.25 billion- 10 years at 5%
  • $1.25 billion- 25 years at 5.5%

The Bureau of the Treasury on Tuesday, January 10, said that final prices were lower compared to the guide prices due to high demand. They were also able to upsize the transaction from an initial target issue size of $2 billion, citing “improved market sentiments.”

For the 5.5-year and 10.5-year tranches, the final price is lower by 50 basis points (bps) from the guide price. For the 25-year offer, it was lower by 45 bps.

The transaction is expected to settle on January 17. The global bonds are expected to be rated Baa2 by Moody’s, BBB+ by Standard & Poor’s, and BBB by Fitch.

The borrowings were made amid high volatility in global credit markets and a rate-hike cycle. The Bureau of the Treasury said it timed the offering by considering signs of slowing inflation and alleviating concern of the US Fed tightening.

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“The blockbuster reception and tight pricing achieved in all tranches of our latest offering, despite coming on the heels of curtain-raisers done by other big-name sovereigns, reaffirms the distinction of Philippine credit as favored proposition even in times of uncertainties in the market landscape,” said National Treasurer Rosalia de Leon.

The bond offering will support government expenses, which is expected to surpass revenues by P1.47 trillion in 2023. – Rappler.com

$1= P55.11

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.