Philippines watching markets before global bond sale
Wednesday, 4 January 2012
MANILA, Jan 3 (Reuters): The Philippines will be assessing the state of overseas markets in the first trading days of the year before finalizing the issue of a planned dollar-denominated global bond of as much as $1.5 billion, officials said on Tuesday.
The Southeast Asian government is planning to sell global bonds with maturity of at least 10 years, and has mandated eight banks to manage the offer.
"We have to find out how markets would open or how markets are reacting to Europe," Rosalia de Leon, head of the Finance department's international finance group told Reuters over the telephone, referring to the euro zone's sovereign debt woes.
She said the final terms of the sale, including size and tenor, would be set once Manila gets enough information on current market sentiment.
Manila has a track record of selling global bonds early in the year to cover bulk of its annual foreign debt requirement and obtain favourable borrowing costs. In 2011, it sold $1.25 billion in peso-denominated global bonds in the first week of January.
The government is currently sounding off investors on the bond offer and remains optimistic that there would be enough demand for a global bond of at least 10 years despite the euro zone's debt crisis and weakness in the US economy.
"There is enough appetite for at least 10-year tenors," said another finance department official who asked not to be quoted. "More foreign funds are really dedicated to that kind of tenor."
The official said market feedback would confirm which tenors would be more appealing to investors. Manila had earlier said it was keen to sell 10-year and 25-year global bonds as it seeks to lengthen its debt maturities.
The government last month mandated Citigroup Inc, Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc, HSBC, JP Morgan Chase , Standard Chartered Plc and UBS AG to manage the bond offer, though the exact timing of the sale has yet to be determined.
Neighbour Indonesia, which returned to investment-grade status last month, is also planning to sell global bonds in the first quarter this year.
The Philippines is rated one notch below investment grade by Fitch and two notches below by Standard & Poor's and Moody's. On Dec. 16, S&P revised its outlook on Philippine debt to positive from stable, but did not raise the rating.
The Southeast Asian government is planning to sell global bonds with maturity of at least 10 years, and has mandated eight banks to manage the offer.
"We have to find out how markets would open or how markets are reacting to Europe," Rosalia de Leon, head of the Finance department's international finance group told Reuters over the telephone, referring to the euro zone's sovereign debt woes.
She said the final terms of the sale, including size and tenor, would be set once Manila gets enough information on current market sentiment.
Manila has a track record of selling global bonds early in the year to cover bulk of its annual foreign debt requirement and obtain favourable borrowing costs. In 2011, it sold $1.25 billion in peso-denominated global bonds in the first week of January.
The government is currently sounding off investors on the bond offer and remains optimistic that there would be enough demand for a global bond of at least 10 years despite the euro zone's debt crisis and weakness in the US economy.
"There is enough appetite for at least 10-year tenors," said another finance department official who asked not to be quoted. "More foreign funds are really dedicated to that kind of tenor."
The official said market feedback would confirm which tenors would be more appealing to investors. Manila had earlier said it was keen to sell 10-year and 25-year global bonds as it seeks to lengthen its debt maturities.
The government last month mandated Citigroup Inc, Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc, HSBC, JP Morgan Chase , Standard Chartered Plc and UBS AG to manage the bond offer, though the exact timing of the sale has yet to be determined.
Neighbour Indonesia, which returned to investment-grade status last month, is also planning to sell global bonds in the first quarter this year.
The Philippines is rated one notch below investment grade by Fitch and two notches below by Standard & Poor's and Moody's. On Dec. 16, S&P revised its outlook on Philippine debt to positive from stable, but did not raise the rating.