The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Going back to the market one more time

Philippines

The Republic of the Philippines has issued a e500 million ($444 million) bond, increased from an original target size of e250 million, maturing in December 7 2006. The issue was priced at 99.865% with a coupon of 9.375% and a yield of 9.41%. The spread over euribor is 500 basis points. Deutsche Bank, UBS Warburg and Salomon Smith Barney acted as lead managers.


Despite having said that it would not borrow further this year, the government is issuing this debt to help refinance the state-owned National Power Corporation (Napocor).


The Philippines has combined public and private external debt of $50.8 billion and the market is concerned about its rising debt levels. The government, however, excludes Napocor from the national borrowing programme. Jose Isidro N Camacho, secretary of finance for the Philippines, explains that: "Napocor has always had to finance itself. Normally we would ask them to do it and we would provide a guarantee. If the spread gets too wide we normally step in." Basically, Napocor's debt is a contingent liability for the sovereign but isn't a direct borrowing obligation.


The mandated firms suggested that the finance ministry raise the money and pass it on to Napocor, rather than the government guaranteeing the debt issued by the power company, because it is a more efficient way to raise capital.




You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree