PH raises $1.39 B from Samurai bond sales

The Duterte administration has successfully returned to the yen debt market and raised more than $1 billion to support the national government’s ambitious infrastructure program.

In a statement, Finance Secretary Carlos G. Dominguez III said yesterday that the national government sold 154.2 billion yen from the sale of multi-tranche “Samurai bonds,” equivalent of $1.39 billion.

Manila’s latest offering marked the Philippines’ return to the Samurai market after an eight-year break, and the first time in nearly two decades that it has issued yen-denominated notes on a stand-alone basis.

According to the Department of Finance (DOF), the Samurai bond was “well received” by a good mix of institutional and regional investors, mostly were new to Philippine credit.

They include asset managers, life insurers, trust banks and specialist banks, regional accounts including shinkin banks, non-Japanese accounts and corporates, the DOF said.

The government sold 40.8 billion yen in 10-year bonds, 6.2 billion yen in five-year notes and 107.2 billion yen in three-year IOUs.

“With overwhelming demand from both onshore and offshore investors, the Republic was able to secure the largest issuance size of a Senior Samurai bond for the year,” Dominguez said in a mobile phone message.

“The three-year tranche was priced 25 basis points (bps) above benchmark, tighter than that of the recent Panda bond issuance (35 bps). The five year tranche was priced at 35bps, and the 10-year tranche was priced at 60bps above the benchmark,” he added.

Manila’s Samurai bond coupon was set at 0.38 percent, 0.54 percent, and 0.99 percent for the three-, five, and 10-year tranches, respectively.

“Overall, the transaction yielded a weighted average spread of 34.7 bps above benchmark. Compared to our peers, the Republic priced tighter and issued more than Indonesia (JP¥100 billion) and higher-rated Mexico (JP¥135 billion),” the finance chief said.

National Treasurer De V. Leon said this year has been a trailblazing year for the Philippines in the International capital markets.

“In March we issued our debut Panda Bond to tremendous investor endorsement. And with today’s Samurai offering, we continue to expand and diversify our market access,” De Leon said.

Daiwa Securities Co. Ltd., Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., Mizuho Securities Co., Ltd., Nomura Securities Co., Ltd., and SMBC Nikko Securities, Inc. acted as Joint Lead Managers and Book Runners for the issuance of the Placement.