Philippines awards $2.3 bln retail bonds at price-setting auction

MANILA, Nov 16 (Reuters) – The Philippine government awarded 113.545 billion pesos ($2.26 billion) worth of 5-1/2-year retail bonds at an auction on Tuesday, more than three times its initial offer, as it seeks to boost funding for economic recovery measures.

Tenders totalled 165.033 billion pesos against an initial offer of 30 billion pesos, with the notes priced at 4.625%, slightly lower than 4.750% coupon rate for the recently re-issued treasury bonds also falling due in 2027.

The latest retail bond offer drew strong demand on expectations that interest rates will rise as the “era of loose monetary policies comes to a close starting with Fed taper announcement”, National Treasurer Rosalia De Leon said.

It is the government’s second peso-denominated retail bond offering this year, and follows its maiden onshore retail dollar bond issue that raised $1.6 billion in September, helping boost funding for post-pandemic recovery measures. nL4N2QX1FP

It also represents the 26th tranche of a government fund-raising programme that offers small investors an opportunity to grow their money pool.

The bonds will be available to the public at a minimum investment of 5,000 pesos and will be listed for trading on the Philippine Dealing and Exchange Corp platform.

Holders of fixed-rate treasury notes maturing in 2022 can also swap their holdings for the bonds due in 2027. The offer runs from Tuesday until Nov. 26, and issuance is on Dec. 2.

The government traditionally offers retail treasury bonds denominated in local currency, with the most recent in March, when it sold 463.3 billion pesos of three-year bonds. nL2N2L20OA

($1 = 50.28 Philippine pesos)

(Reporting by Enrico Dela Cruz and Karen Lema
Editing by Shri Navaratnam)

((enrico.delacruz@tr.com))