PH readies offering of dual-tranche dollar bonds

The Philippine government is readying a benchmark-sized issuance of dual-tranche dollar bonds, which would be its first global bond offering for this year.

The country is looking to issue 10- and 25-year dollar bonds, based on a report by Reuters.

Benchmark-sized issues are typically worth at least USD 500 million.

The 10-year papers will be initially priced at US Treasuries plus 120 basis points (bps), while the 25-year sustainability bonds will be priced at the 6.05% area, according to a term sheet seen by Reuters.

Final pricing was expected overnight.

The bonds will be senior unsecured notes and are shelf-registered with the US Securities and Exchange Commission.

Proceeds from the issuance will be used for “general budget financing,” while funds raised from the 25-year notes will be earmarked for “general budget financing and to finance or refinance assets in line with the sovereign’s sustainable finance framework,” fixed-income news provider IFR reported

Bank of America, Citigroup, HSBC, JPMorgan, Morgan Stanley, Standard Chartered were tapped as the joint bookrunners.

The bonds have a settlement date of May 14.

Fitch Ratings, Moody’s Ratings and S&P Global Ratings rated the proposed bonds at “BBB,” “Baa2,” and “BBB+,” respectively, matching their ratings for the Philippines’ sovereign debt.

“According to the terms and conditions available to Moody’s, the bonds to be issued under the shelf program will constitute direct, unconditional and unsubordinated obligations of the Government of the Philippines,” Moody’s Ratings said in a statement on Tuesday.

The dollar-denominated issuance would be the government’s first global bond offering for this year.

In 2023, the government raised USD 3 billion from its three-tranche dollar bond offering in January, USD 1.26 billion from a retail dollar bond issue in October, and USD 1 billion from its maiden issuance of Sukuk bonds in December.

This year, the government’s borrowing program is set at PHP 2.57 trillion, of which 25% will come from foreign sources. — Luisa Maria Jacinta C. Jocson with Reuters