Monday, April 15, 2024

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The Philippines has sold $611 million worth of RDBs.


THE PHILIPPINE government on Wednesday raised $611.2 million (P34.8 billion) at an auction of its second onshore retail dollar bonds (RDBs).

Bids at the auction to determine interest rates reached $636.2 million, slightly surpassing the $636 million available at the Bureau of the Treasury’s initial sale of retail dollar bonds during President Ferdinand R. Marcos, Jr.’s term.

The raised funds exceeded the minimum requirement of $200 million, but fell short of the $1 billion goal stated by Finance Secretary Benjamin E. Diokno last week.

2020

The amount raised in 2020 was lower than $1.593 billion.fi

The initial sale of retail dollar bonds in 2021 during the term of former President Rodrigo R. Duterte.

The fithan the 3.25% set for the 20-year

The 12.5-year bonds had a coupon rate of 5.75%, which was 350 basis points (bps) above the 10-year retail dollar bonds’ rate of 2.25% and 437.5 bps above the 20-year bonds’ rate of 3.25%.than the five-year bonds offered in October 2021.

The interest on the debt ranged from 5% to 5.75%, resulting in an average of 5.509%.

Although the sale of bonds is minor in comparison to the $3 billion in overseas notes that the government sold in January, individuals are proving to be a steady source of funding for the Philippines. In February, the country raised P283.117 billion through the sale of peso retail bonds.

Nicholas Antonio T. Mapa, a senior economist at ING Bank N.V. Manila, stated in a Viber message that the Philippines is maintaining a positive credit rating, which could aid in determining prices. He also mentioned that in today’s market with a surplus of available funds, investors will be seeking alternative options to invest their money.

10-year benchmark rate

The coupon rate for retail dollar bonds was 54.7 basis points lower than the 10-year benchmark rate.fi

According to the published PHP Bloomberg Valuation Reference Rates on the Philippine Dealing System’s website, a five-year debt paper was traded at a rate of 6.2967% in the secondary market on Wednesday.

The coupon rate remains higher than the yields of previously issued offshore dollar bonds in the secondary market by Rizal Commercial Banking.Corp. Chief Economist Michael L.

In a message on Viber, Ricafort remarked.

He mentioned that this has the potential to allure additional investors, resulting in an increase of interest.fi

The government may attempt to raise a sizeable amount of money, possibly exceeding $1 billion.

The off

The time frame for the debt in dollars is from September 27th to October 6th, with the final payment due on October 11th. The bonds will reach maturity on April 11th, 2029.

The RDBs have approved BDO Capital and Investment Corp., Bank of the Philippine Islands, China Banking Corp., Development Bank of the Philippines and First Metro Investment Corp. (FMIC) as their authorized selling agents.

HSBC, Metropolitan Bank and Trust Co., Philippine National Bank, Security Bank Corp., Land Bank of the Philippines, and Union Bank of the Philippines, Inc. are also included in this group.

The government’s goal for this year is to acquire P2.208 trillion, with P1.654 trillion coming from domestic sources and P553.5 billion from foreign sources.