Govt issues P200B worth of long-term bonds

National Treasurer Roberto Tan said Tuesday the government has issued P200 billion worth of bonds as part of its debt management program. The government on Friday issued P200 billion worth of 2035 and 2020 bonds in a domestic debt swap and sale, Bureau of the Treasury data showed. The total issue consisted of P34 billion worth of 2020 bonds and P166 billion worth of 2035 bonds, according to the Department of Finance. “This has created a very deep benchmark for 25 year bonds, the longest tenor on our yield curve," Finance Secretary Cesar Purisima said in a text message to reporters. From these transactions the government would be able to save around P6 billion, or P3 billion from both tenors, based on their net present value, Purisima said. The government also sold P15 billion of new 2035 bonds, mainly to buy back some local debt. No new money, however, would go to the national government after the domestic debt swap and sale of new bonds. On Friday, the bids for debt-swap reached P150 billion for the new 2035 bonds and around P50 billion for the 2020 bonds. While bids for the new money component were over P20 billion, the government sold only P15 billion. The minimum coupon rate for the 2020 bonds was 5.875 percent and 8.125 percent for the 2035 bonds. “There is a minimum price already which was fully subscribed," Tan said. The settlement is on Dec. 16, according to the schedule set by the Bureau of the Treasury, with BPI Capital Corp., First Metro Investment Corp., Hongkong and Shanghai Banking Corp. Ltd., and Land Bank of the Philippines as joint managers and arrangers. The Aquino administration first did a bond swap in September, issuing $2.04 billion in new 2021 US dollar bonds and $950 million in re-opened 2034 US dollar bonds or of $2.99 billion in a dollar debt swap. It also sold $200 million in new 2011 bonds. These initiatives will give the government a longer debt maturity profile, with similar future activities likely to happen as part of the government’s debt management program. — VS/KBK, GMANews.TV