PHL moves planned debt swap to July 5

The Philippine government has moved the launch of a planned debt swap to July 5 after it failed to meet its June 28 deadline citing lack of compliance with requirements, an official of one of the banks tapped to arrange the transaction said on Wednesday. According to First Metro Investment Corp. (FMIC) president Robert Juanchito, the closing of the offer period will also be pushed back to mid-July. The planned swap involves offers of 10- and 20-year bonds in exchange for previously issued bonds that are about to mature. A minimum issue size of P40 billion has been set for each tenor. Through the swap, government hopes to lengthen maturities of existing debt. Juanchito said the volume may equal the government's offer in a similar debt swap deal in December, but noted that no new money may be involved. "There is a strong possibility that the issue size in December will be replicated," he added. The government had earlier planned to launch the swap on June 28, but failure to comply with documentation requirements — specifically the approval of the Office of the President, sources said — prompted the move. Government had appointed Land Bank of the Philippines and the Development Bank of the Philippines to handle the transaction. Aside from FMIC, government also hired private financial firms such as BPI Capital Corp., SB Capital Investment Corp. and Citibank to arrange the swap. In December, the government successfully awarded roughly P200 billion worth of new 2035 and 2020 bonds in a similar debt-swap agreement. With the planned debt swap in July, the government is looking to finance a budget deficit expected to reach P290 billion this year, or 3.2 percent of the gross domestic product. —JMT/VS, GMA News