Gov’t eyes $2-B panda, samurai bonds

The government is eyeing to raise as much as $2 billion from the issuance of renminbi-denominated panda bonds and yen-denominated samurai bonds this year, the Bureau of the Treasury (BTr) said yesterday.

In an interview, National Treasurer Rosalia De Leon said the government is considering to issue $300 million to $500 million worth of panda bonds by the second quarter, plus another $1 billion to $1.5 billion worth of samurai bonds in the second half of 2019.

The volume for the panda bond issuance, she said, is higher than the $230 million issued by the government during its last activity in the Chinese debt market in March last year.

“Last time, it’s just a token amount of $200 million equivalent in renminbi. This time, we are looking at around $300 to

$500 million equivalent in renminbi,” De Leon said.

De Leon said the BTr has decided to upsize the volume of its issuance, anticipating the demand from offshore investors through China’s bond direct facility.

“When we did the first panda issue, we were just looking at the onshore Chinese investors, but they opened up the bond direct facility. That also allowed offshore investors to invest in the onshore market. Just the same, we see there would also be a lot of interest from offshore investors to invest in the onshore renminbi market,” De Leon said.

The national treasurer said the renminbi-denominated issuance may have multiple tranches, spanning three, five, and seven years of maturity.

The fund raising activity is also expected to be conducted as early as the second quarter, or about 12 months after the government’s last panda bond issuance.

“We are nearly finished with all our approvals. We are just watching the market,” she said, adding that a non-deal roadshow and a Philippine Economic Briefing in China is already scheduled in March.

Meanwhile, De Leon said the BTr is also looking to issue as much as $1.5 billion worth of samurai bonds, scheduled around 12 months after its last samurai bond issuance in August last year.

The samurai bonds, she said, would once again have multiple tranches with three, five, and 10 years of maturity. “We are looking at about $1 billion to $1.5 billion equivalent in yen. Right now we are looking at the same tenors (as last time) so we still have to see the appetite of Japanese investors,” De Leon said.

The national treasurer said the BTr would still need to secure the necessary approvals for the upcoming bond issuance, but a nondeal roadshow, as well as a Philippine Economic Briefing, is already scheduled this February in Osaka, Japan.

The Philippines issued in March last year 1.46 billion renminbi worth of three year panda bonds at a coupon rate of five percent.

It also sold last August Y107.2 billion worth of samurai bonds with maturities spanning three, five, and 10 years.