The Republic of the Philippines has done it again. Just two months after raising $1 billion in the peso global market, the sovereign borrower is planning to return with a US dollar bond.
In a surprise move, the Philippines’ finance ministry yesterday sent a request for proposals to 10 to 15 banks for the potential bond issue, according to a source. The deadline for submissions is Friday (March 11).
The Philippines, known for its impeccable timing, might try to time the deal ahead of Indonesia, which is planning its own dollar global bond. Deutsche Bank, J.P. Morgan and UBS are mandated for the Indonesian deal, which is expected to be issued off the sovereign's global medium-term note programme. It was updating its documents as of mid-last month.
Given its record of lightning quick execution, the Philippines could launch a deal reasonably soon after a mandate, having recently filed its shelf registration of up to $5 billion of debt securities with the US SEC in December last year. However, according to one banker, internal approvals from the Philippines central bank might take some time.
The Philippines last tapped the bond market in January this year with a Ps54.7 billion ($1.25 billion) 25-year peso global that paid a yield of 6.25%. The funds raised went towards refinancing debt that matured in February.
The Philippines also completed a $3 billion US dollar debt swap in September last year, and tapped the US dollar bond market in January 2010, when it issued a $1.5 billion dual-tranche SEC-registered deal that was jointly arranged by Barclays Capital, HSBC and Deutsche Bank.
The Philippines could be raising funds to plug its fiscal deficit, which stood at Ps314.4 billion for 2010, or equivalent to 3.7% of its gross domestic product. The sovereign is rated Ba3/BB/BB by Moody’s/S&P/Fitch.
Away from the Philippines sovereign, Industrial Bank of Korea is expected to start roadshows for its dollar bond during the next few days. BNP Paribas, Citi, Morgan Stanley and Royal Bank of Scotland are bookrunners.
Elsewhere, Hong Kong-listed property developer SPG Land has mandated Morgan Stanley and Nomura as joint bookrunners for its proposed Reg-S offering of US dollar senior notes. Subject to market conditions, the deal is expected to be launched after a roadshow covering Hong Kong, Singapore and London, which started yesterday.
