The Philippines issues a Ps44.1 billion global bond

The Republic of the Philippines issued a landmark deal early Friday morning when it priced its debut global peso bond. The Ps44.1 billion ($1 billion) long-dated 10-year deal is denominated in Philippine pesos, but settled in US dollars with all payments indexed to the peso spot rate.

The notes will mature on January 15, 2021 and pay a 4.95% semi-annual coupon, which is the lowest coupon on record for a 10-year Philippine sovereign, whether denominated in pesos or dollars. The bonds were re-offered at 99.607 to yield 5%. The pricing was based on an exchange rate of 44.109 pesos per dollar and the notes were rated Ba3 by Moody’s and BB by Standard and Poor’s.

The Philippines is a frequent and experienced borrower both in its local currency market and in the offshore dollar market. However, with favourable peso-dollar exchange rates, the Philippines saw the opportunity to issue a global peso security and target an investor base that may not typically have access to local currency bonds in the domestic market.