The Philippines milks investment grade status

The country swapped $1 billion of its existing bonds with notes from its new $1.5 billion issue, cutting funding costs and monetising on its investment grade ratings.

The Republic of Philippines raised a $1.5 billion 10-year senior unsecured note on Thursday, the country’s first dollar note in two years and the third sovereign to hit global debt markets this week.

As part of the country’s liability management programme, the sovereign opted to execute the transaction differently, embarking on an “accelerated switch tender” the first of its kind in Asia which could pave the way for more to come to the market, believe syndicate bankers.

An accelerated switch tender is a process where the issuer offers to buy back its existing bonds at a specified bid price and replace them with new paper issued a...

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