Philippines Eyes Euro-Denominated Benchmark Bonds Amid Growing Market Momentum

Strategic Insights -

The Philippines is gearing up for another notable debt sale, this time with euro-denominated benchmark bonds, mere months after its successful US dollar-denominated debt issue in December 2020. The country has tapped prominent banks to steer the proposed offering, including BNP PARIBAS, Credit Suisse, Goldman Sachs, J.P. Morgan, Nomura, and Standard Chartered Bank. A series of investor meetings is slated to kick off on April 19, 2021, potentially paving the way for a four-year, 12-year, or 20-year euro-denominated bond offering, subject to market conditions. The planned issue is expected to receive investment-grade ratings from Moody's, S&P Global, and Fitch, a reflection of the country's economic standing.

Key Takeaways:

  • The Philippines is considering the issuance of euro-denominated benchmark bonds, building on the success of its USD2.75 billion US dollar-denominated debt sale in December 2020.
  • The proposed bond offering will be managed by leading financial institutions BNP PARIBAS, Credit Suisse, Goldman Sachs, J.P. Morgan, Nomura, and Standard Chartered Bank.
  • A series of investor meetings is planned in Asia, Europe, and the US starting April 19, 2021, to gauge investor interest in the proposed bond offering.
  • The planned bond issue is expected to receive investment-grade ratings from Moody's, S&P Global, and Fitch, a testament to the country's economic stability.
  • The success of the December 2020 US dollar-denominated bond sale is attributed to its record-low interest rates, with the coupon for the 10-year bond at 1.648 percent and the 25-year bond at 2.65 percent per year.

Statistics:

  • The Philippines plans to issue euro-denominated benchmark bonds.
  • Start of investor meetings: April 19, 2021.
  • Companies managing the bond offering: BNP PARIBAS, Credit Suisse, Goldman Sachs, J.P. Morgan, Nomura, and Standard Chartered Bank.
  • Proposed bond tenor: four years, 12 years, or 20 years.
  • Expected investment-grade ratings: Moody's (Baa2), S&P Global (BBB+), and Fitch (BBB).
  • US dollar-denominated bond sale in December 2020: USD2.75 billion.

Sources:

  • US Securities and Exchange Commission (SEC)