Global bond issue could come before Samurai offer — Tan
By Gerard S. dela Peña, BusinessWorld | 07/08/2009 2:04 AM
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MANILA - The government might issue global bonds ahead of a planned yen-denominated float as discussions are still ongoing with Japanese authorities.
"The possibility is there," National Treasurer Roberto B. Tan yesterday said when asked if the Samurai bond issuance could take a back seat to a global offer.
Mr. Tan said a plan to borrow at least $500 million from the international capital market was expected to be approved by the Bangko Sentral ng Pilipinas (BSP) "soon."
Central bank officials have been quoted as saying that a government application to borrow abroad could be approved by the policy-making Monetary Board later this week.
The planned $1-billion Samurai bond offer, Mr. Tan said, remained in the early stages even if a guarantee had already been secured from the Japan Bank for International Cooperation (JBIC).
"We have not yet filed a separate request [for approval of the Samurai bonds offer]. It is still in the early stage of discussions between the two governments," Mr. Tan told reporters yesterday.
"In the meantime we’re holding discussions with them (JBIC)," he added.
Issuing global bonds could be a better option for the government, analysts have said, especially now that offshore borrowing costs have gone down. Government officials have said the fees JBIC wants to charge are also an issue.
ROP bonds due 2019 are currently trading at 6.36% in the secondary market, down from 8.5% when these were first sold in January.
Both the global bonds and the Samurai bonds are meant to fund the country’s P250-billion budget deficit for this year.
Mr. Tan also said the government would decide on a peso-denominated retail Treasury bond (RTB) issue — originally slated this month — after it gets Monetary Board approval of the global offer.
"Definitely we will issue RTBs. There are small investors who want to avail of that," Mr. Tan said.
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