We highlight below some of the bonds we currently prefer, based on the value they offer and the strength of their credit. Research from CreditSights, our third-party provider and one of the best credit research firms in the world, helped us come up with these picks.
Issuer: Republic of the Philippines
Credit Rating: Baa2 / BBB+ / BBB
Bond: ROP 5.609% 33
Indicative Price: 98.125
Indicative Year-to-Maturity (YTM): 5.851% (as of October 24, 2022)
Issuer: Kingdom of Saudi Arabia
Credit Rating: A1 / A- / A
Bond: KSA 32New
Indicative Price: 98.250
Indicative Year-to-Maturity (YTM): 5.732% (as of October 24, 2022)
- The new 10-year KSA (Kingdom of Saudi Arabia) and ROP (Republic of the Philippines) US dollar bonds were issued with generous premiums over the secondary market.
- Historically, INDONs (Indonesia) yield 20 basis points (bps) higher than ROPs, but the new ROPs now offer the same yield as INDONs of the same tenor. We therefore see better value in ROPs, particularly in ROP 33 versus the INDON 32New with a similar tenor. Meanwhile, KSA 32New is yielding just 10 bps less than ROP 33 despite being A-rated.
(Call your relationship manager or investment specialist to pursue this opportunity.)