MANILA -- The Philippines on Wednesday raised 1.2 billion euros from its first overseas bond sale for the year, officials said, as the government sought to fund an ongoing infrastructure overhaul and social welfare programs.
Manila issued 9-year bonds at the lowest-ever coupon or interest and 3-year euro bonds at an unprecedented zero coupon, Finance Secretary Carlos Dominguez said in a statement.
Oversubscription or demand that exceeded the 1.2-billion euro offer, peaked at 4.3 billion euros, National Treasurer Rosalia de Leon said in a statement.
"Orders came from a diverse group of investors both in the onshore and offshore market, with frequent as well as new names on the books. We are also reaping the benefits of actively engaging investors prior to going out in the market," de Leon said.
Government sold 600 million euros in 3-year zero coupon bonds at 0.133-percent yield, with a spread of 40 basis points above the benchmark. The 9-year bonds had a 0.70-percent coupon at 70 basis points above the benchmark.
The actual spreads were tighter compared to the indicative spreads of 65 basis points for the 3-year note and 95 basis points for the 9-year bonds according to Bloomberg. The spread, or extra yield demanded by investors, is tighter when risk is perceived to be less.
"We are also reaping the benefits of actively engaging investors prior to going out in the market," De Leon said.
Philippine sovereign debt is rated at investment grade by all major debt-watchers and the country is seeking its first ever "A" score.
It set the 2020 national budget at P4.1 trillion, which President Rodrigo Duterte signed into law in early January.
(EDITOR'S NOTE: This story corrects the yield on 3-year euro bond to 0.133 percent and the coupon on the 9-year bond to 0.70 percent. We apologize for the error)