PHILIPPINES STARTS $230-MILLION PANDA BOND ISSUE
PhilStar.com | 20 March 2018
MANILA, Philippines — The Philippines is issuing today 1.46 billion renminbi ($230 million) worth of three-year panda bonds in the Chinese onshore market to help raise funds for the government’s infrastructure program, the state-run Investor Relations Office (IRO) said yesterday.
In a statement, the IRO said the panda bonds would be offered to Chinese investors today, with settlement date on March 23.
Proceeds of the bond sale would be deposited with the Bangko Sentral ng Pilipinas (BSP) as part of its international reserves and converted to Philippine peso, according to the IRO.
“The proceeds will help fund the government’s infrastructure projects and other financing requirements,” it added.
This marks the first time the Philippine government issues renminbi-denominated bonds in the Chinese onshore market.
Finance Secretary Carlos Dominguez III expressed confidence the country’s first venture into this market would be successful.
“This is one of the concrete results of President Duterte’s independent foreign policy,” the finance chief added.
National Treasurer Rosalia De Leon, for her part, said the government is “upbeat” about the fund raising activity given the interest expressed by Chinese investors.
“Pricing will be competitive compared with dollar (bonds) and the good reception during roadshows augurs well for a successful launch,” De Leon said.
A Philippine delegation led by De Leon and BSP Deputy Governor Diwa Guinigundo organized an international deal roadshow last March 14 to 16. The team met potential investors in Singapore, Hong Kong and China to present the terms of the bond issuance and to provide updates on the Philippine economy.
“The Philippine delegation’s economic briefing received overwhelming participation particularly from onshore investors in Beijing,” the IRO said.
According to the IRO, the issuance will take advantage of the Bond Connect scheme, which allows offshore investors to participate.
“Demand from both onshore and offshore investors will allow the Republic to secure a favorable rate upon pricing date,” the IRO said.
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