PHL's debt swap offer fetches P207B in tenders

Demand for bonds offered in a recent debt swap launched by the Philippine government raked in more than P207 billion in tenders on Wednesday, the last day of the offer period. Roberto Juanchito Dispo, president of First Metro Investment Corp. (FMIC), said that as of Wednesday morning, bids have gone up to P155 billion and P52 billion for the new 2022 and 2031 bonds, respectively. FMIC is one of six banks hired by government to handle the transaction, Dispo expects the total demand would reach P250 billion, but no final figures were available as of this posting. National Treasurer Roberto Tan, meanwhile, remarked that Wednesday's results indicated "a good swap." For the exchange, the government has set a minimum coupon rate of 6.375 percent for the 10.5-year bonds maturing by January 2022, and 8-percent for the 20-year bonds due by July 2031. All bonds maturing from July 2011 to April 2021 and from March 2022 to January 2031 were included in the debt swap as part of government’s debt consolidation program. To create a clear market for the transaction, the Bureau of the Treasury last week changed the tenor of its July 19 T-bond auction to four years from 20 years. Aside from FMIC, the Land Bank of the Philippines and the Development Bank of the Philippines were tapped by government to arrange the swap. Private firms such as BPI Capital Corp., SB Capital Investment Corp. and Citibank were also assigned to handle the deal. With the swap, government intends to finance a budget deficit of P290 billion this year, or 3.2 percent of the gross domestic product. —JMT/VS, GMA News