philippines-completes-debt-exchange-warrant-sale

Philippines completes debt exchange warrant sale

A second sale of warrants allows domestic banks to switch foreign currency bonds into peso-denominated debt and circumvent new risk-weighting rules.
The Republic of the Philippines announced yesterday that it had completed the sale of its second series of debt exchange warrants. It sold $2.25 million of warrants representing a face value of $2.25 billion foreign currency-denominated Philippine bonds ROPs with maturities beyond November 2017 and up to September 2032.

The warrants will allow holders to exchange ROPs into local currency peso debt in case of a credit default by the government, and resolve a problem caused by the implementation of the Basel II framework, which should be fully effective from January 1, 2009. Under Basel II, ROPs held by Philippine commercial banks would be 100% risk-weighted and banks would have to...
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