Government to price Samurai bond issue Feb 23

MANILA, Philippines - The government is set to price its Samurai bond offer of up to $1.1 billion (¥100 billion) on February 23 and possibly complete its commercial borrowing requirements for the year, Finance Secretary Margarito Teves said Tuesday night.

The forthcoming borrowing activity, which would put the Philippines in deeper debt, would help finance a record budget deficit this year, estimated at P293 billion or above the initial estimate of P233.4 billion.

Teves said the Japan Bank for International Cooperation and the Philippines represented by Philippine Ambassador to Japan Domingo Siazon signed on Tuesday the framework agreement for the bond offer under the Japanese Market Access Support Facility.

The agreement shall allow the Philippines to issue up to $1.1 billion worth of Samurai bonds for this year and next year. Furthermore, the agreement stipulates that JBIC will provide 95 percent guarantee for interest and principal payments of the bonds.

“The bonds are scheduled to be priced on February 23 and to be settled and closed on March 2,” Teves said.

A Philippine team led by National Treasurer Roberto Tan earlier embarked on an investors roadshow for the private placement format of Samurai bonds. The roadshow included meetings among several officials of the government and Japanese bond investors in Tokyo last Feb. 3 and 4.