Philippines to issue $230m panda bond
MANILA: The Philippines said it will issue an inaugural 1.46 billion yuan ($230 million) three-year “panda” bond in the onshore Chinese market on Tuesday.
IFR, a Thomson Reuters publication, reported that the Philippines, set to be the first Southeast Asian country to issue panda bonds, has announced indicative price guidance of 5.0-5.6 per cent for the offering.
A panda bond is a debt security issued in China by a non-chinese borrower and denominated in yuan.
The proceeds will form part of the Philippines’ foreign exchange reserves and, when converted to pesos, can be used for budget spending and for projects in China’s One Belt, One Road programme, IFR said, citing the bond prospectus. Bank of China is lead underwriter on the offering with Standard Chartered Bank (China) as joint lead underwriter. The Philippines and the notes have AAA ratings from China Lianhe Credit.
The issuance follows investor presentations last week, with a Philippine delegation led by National Treasurer Rosalia de Leon and Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo meeting potential investors in Singapore, Hong Kong, and China.
“We are upbeat about this activity because of the significant interest from the market based on the inquiries and feedback we have received,” De Leon said in a statement on Monday.
The issuance will be taking advantage of the Bond Connect scheme, which allows offshore investors to participate, the Philippines’ Investor Relations Office said.