The Philippine government launched Thursday a global offering for 10-year US dollar bonds due 2028.
The government is raising $2 billion from the global bond offering, of which $1 billion will be used for budgetary support and infrastructure programs and the remaining $1 billion to redeem 14 issued bonds due between 2019 and 2037.
“The settlement of the new bond offering is expected to occur on Feb. 1, 2018,” the Treasury said.
Proceeds are expected to help cover the government’s budget deficit which is expected to account for 3 percent of the gross domestic product this year.
The Bureau of Treasury said it tapped Citigroup Global Markets Inc., Credit Suisse Securities Llc, Deutsche Bank Securities Inc., Morgan Stanley & Co. Llc, Standard Chartered Bank and UBS AG Hong Kong Branch as joint lead managers for the new bond offering.
The deadline of submission of offers for the bond swap will be early morning on Jan. 19, Manila time, while the settlement period is on Jan. 25.
The government earlier said it expected to borrow 26 percent from foreign sources and 74 percent from domestic sources this year.
S&P Global Ratings assigned a ‘BBB’ long-term foreign currency issue rating to the proposed
benchmark-sized US dollar-denominated senior unsecured notes which represent direct, general, unconditional, unsecured and unsubordinated obligations of the government.
Moody’s Investors Service assigned a provisional (P)Baa2 senior unsecured rating to the bond offering. “The rating mirrors the government of the Philippines’ issuer rating of Baa2 with a stable outlook,” the debt watcher said.
The government posted a budget deficit of P243.5 billion in the first 11 months of 2017, behind the P482.1-billion deficit target for the year.
The government set a record P3.77-trillion budget for 2018 which would help finance major infrastructure projects.
Moody’s said improved debt affordability would give the government fiscal space for higher infrastructure spending, which was expected to increase to more than 7 percent of GDP by 2022.