Monday, April 15, 2024

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The retail dollar bonds issued by PHL have generated $1.26 billion.


THE PHILIPPINE government

I collected $1.26 billion from the fundraiser.first retail dollar bond (RDB) off

During the Marcos administration, the Department of Finance (DoF) announced.

“We increased the offer from $1 billion to $1.26 billion and it has now been finalized,” stated Finance Secretary Benjamin E. Diokno in a mix of English and Filipino during a press briefing.fing on Friday.

The amount raised was significantly greater than the required minimum of $200 million, but fell short of the $1.6 billion generated during the first retail dollar bond auction of 2021, which took place during the term of former President Rodrigo R. Duterte.

“I believe that given the current market conditions, this is a positive outcome. Additionally, the fact that we were able to increase our initial target of $1 billion is a strong indication,” stated Deputy Treasurer Erwin D. Sta. Ana.

Mr. Diokno stated that there was a slight added cost due to the government’s desire to incentivize more overseas Filipino workers (OFWs) to make investments.

The bonds, which were issued in US dollars and have a maturity of five and a half years, had a coupon rate of 5.75%. They were sold at rates between 5% and 5.75%, resulting in an average rate of 5.509%.

2023

The discount was 437.5 basis points (bps) above the 1.375% interest rate for the year 2023.five-year retail dollar bonds and 350 bps higher than the 2.25% set for the 10-year bonds offered in 2021.

According to Mr. Sta Ana, there was a demand of $1.28 billion for the bonds. However, the Treasury did not give out the full amount as they rejected tenders that exceeded the coupon rate.

“In the auction, we establish a predetermined rate. This is a Dutch auction, meaning that once the rate is set, the corresponding volume is determined,” he explained in a mix of English and Filipino.

“We did not consider a higher yield, as it would exceed the 5.75% coupon and result in excess demand. However, we set the price at 5.75%, so any amount within that range would be accepted. The excess amount was the only portion that we could not accept,” he further explained.

Mr. Sta Ana mentioned that the BTr will have the ability to establish the quantity of individual investors on the date of issuance (October 11th).

Approximately 9% of the purchasers in the previous RDB were individual investors.

The off

The period for the retail dollar bonds lasted from September 27 to October 6, with the settlement date on October 11 (Wednesday).

The bonds will reach maturity on April 11, 2029 and will also be paid quarterly until they mature.

The government intends to introduce Sukuk bonds at the end of November.   

The goal is to generate approximately $1 billion through Islamic bonds, with the smallest unit being set at $200,000.

The government is projected to borrow a total of P2.207 trillion this year, with P1.654 trillion coming from domestic sources and P553.5 billion from foreign sources. – Luisa Maria Jacinta C. Jocson