The Philippines sold $2.75 billion of dollar bonds Tuesday, braving rocky markets after fresh tensions between the US and Europe along with a selloff in Japanese bonds and Treasuries.
The country priced notes with tenors of 5.5, 10 and 25 years, according to a person familiar with the matter. The largest tranche 鈥 a $1.5 billion 10-year 鈥 has a premium of 0.8 percentage point over Treasuries, about 20 basis points tighter than initial price talk, the person added.
The Philippines is one of Asia鈥檚 most-active sovereign bond issuers in overseas markets, relying on such funds to help finance a persistent budget deficit. The government is currently grappling with a graft scandal involving billions of dollars meant for flood-control projects in one of the world鈥檚 most typhoon-prone countries.
Tuesday鈥檚 sale occurred as the Philippine peso has set a series of record lows against the US dollar.
While valuations for the country鈥檚 notes are 鈥渦nexciting,鈥 they should remain reasonably well supported, wrote Nicholas Yap, head of Asia credit desk analysts at Nomura Holdings Inc. Fair value for the 25-year tranche is about 5.65% compared with provided initial guidance of around 5.9%, he added.
The Philippines was among four Asia Pacific borrowers in the dollar-bond market Tuesday 鈥 including South Korea鈥檚 Woori Bank, which priced a $600 million two-part deal. Yield premiums on the region鈥檚 investment-grade bonds have hovered near a record low this month at under 60 basis points on average, helping attract issuers.
The average yield on dollar bonds sold by investment-grade emerging Asian borrowers was about 4.5% on Monday, down from nearly 5.2% when the sovereign last sold dollar debt in the market in January 2025, a Bloomberg index shows. The Philippine government sold a 10-year bond then with a 0.9-percentage-point premium. — Bloomberg
