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The Philippines’ finance officials on Thursday announced the success of the domestic economy’s debt exchange as well as the large demand for its US$ 200 million worth of 10-year bond issued for cash offering.

In a statement, Finance Secretary Cesar Purisima said US$ 4.45 billion worth of bonds were submitted for exchange while bids for the bond due 2021 offered for cash were almost 10 times over-subscribed.

Bonds offered to be swapped are those maturing in 2011, 2013, 2014, 2015, January 2016, October 16, and in 2017 to be exchanged for newly-issued 10-year US dollar-denominated bond or the re-opened 2034.

Also, bonds maturing in January 2019, June 2019, September 2024, October 2024 and those due in 2025, 2030, and 2031 were offered to be swapped for bonds due 2034.

The government issued a total of US$ 4.48 billion worth of newly-issued 2021 bonds during the process - US$ 2.24 billion of which was issued in line with the global bond offering, US$ 2.04 billion for the debt swap, and US$ 200 million for the cash offering.

Purisima said the new 2021 bonds were priced at 99.248 percent, had a coupon rate of four percent and yield of 4.091 percent while the re-opened 2034 bonds had a coupon rate of 6.375 percent, priced at 114.879 percent and yield of 5.276 percent.

He is “very pleased with the impressive outcome of our bond exchange exercise” pointing out that “after a very well received issuance of the Philippine Peso Global Bonds, Asia's first local currency denominated global bonds a few weeks ago, we have once again generated overwhelming support from the investor community with their active participation to exchange their existing global bonds for longer duration.”

“This is another achievement for the government as we go full speed with our plans to effectively manage the government’s financial liabilities,” he said.

The government conducts debt swap to extend maturities of its existing securities as part of its move to manage debt profile.

“The results of the recently concluded bond exchange by the Republic is another milestone in our strategy to extend duration and pro-actively take advantage of the opportunities under the prevailing constructive market environment to realize savings" National Treasurer Roberto Tan said.

Citi, HSBC and UBS were tapped as Joint Dealer Managers and Joint Bookrunners for the transaction. (PNA)

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