PH pays record low yield of 3.7% on latest offshore dollar borrowings

The Philippine government has successfully completed its fresh offshore borrowings after setting its lowest financing cost in history.

Months before the Aquino administration finishes its term, the government raised $2 billion with the sale of 25-year bonds, which is priced to yield 3.70 percent, the lowest ever for a Philippine global bond to date.

According to the Department of Finance (DOF), the coupon rate for sovereign’s 2041 foreign debt is also lower than its initial pricing guidance of 4.00 percent area.

Orders reached approximately $8 billion, coming mainly from the US with 51 percent followed by Asia with 32 percent and Europe with 17 percent, the finance department said.

“Proceeds of the issuance will be used to fund the Republic's switch and tender offer, and related expenses while the remaining amounts will be used for general purposes, including budgetary support,” the government said in a statement.

Meanwhile, the DOF raised its allocation for the separate buyback program from original $1.25 billion to $1.5 billion after total tenders submitted reached $5.6 billion targeted at 16 series of US dollar bonds maturing between 2016 and 2037.

“The Republic’s stellar track record in executing liability management transactions underpins the Aquino administration’s firm commitment to proactive risk management,” Finance Secretary Cesar V. Purisima said in a statement.

“By leveraging on these opportunities to reduce high-coupon debt and to extend the maturity of our debt portfolio, the country achieves valuable savings that we