Govt Floats $500M in Sovereign Bonds
Source: Inquirer.net
The national government Tuesday floated $500 million in sovereign bonds in the international capital market, hoping to complete its foreign commercial borrowing requirement for the year before problems brought on by the US subprime market become worse.
The issue is expected to be priced at about 97-3/8, said two persons involved in the deal. The bonds will mature in 2032. Credit Suisse and Deutsche Bank are handling the bond sale for the Philippines.
The $500 million borrowed commercially from the international capital market is part of the government’s total foreign borrowing requirement of $2 billion. The larger share of $1.5 billion will be drawn from official development assistance extended by multilateral lending institutions, including the World Bank, the Asian Development Bank and the Japan Bank for International Cooperation.
The $2 billion in foreign borrowings account for 30 percent of the government’s total borrowings for this year. The government intends to borrow 70 percent of its financing requirement from the domestic market.
The DoF said borrowing more from the domestic market was a debt-management strategy to minimize the country’s exposure to foreign exchange risks.