Capital markets still alive in the Philippines
The Philippines’ capital markets have started 2006 positively. Capitalizing on the immediate strength of the peso, the Republic of the Philippines was Asia’s first sovereign to tap the market when it raised $2.1 billion from a $1.5 billion 25-year bond and a €500 million 10-year bond, one of the largest fund raisings from Asia for several years.
The deals, led by Citigroup, Credit Suisse, Deutsche Bank and UBS, were both well received since the economic prospects for Asia’s perennial underachiever have brightened somewhat. The US dollar bond priced flat to the existing 2030 bond, while at 6.25% the coupon on the euro bond coupon was the lowest ever for a Philippine bond of equivalent maturity.
In the equity capital markets, First Generation Holdings, the country’s largest independent power producer, launched its IPO though CLSA and UBS, aiming to raise $200 million. It is the first Philippine IPO since the first quarter of 2004, when a flurry of activity promised a recovery in primary market activity that failed to materialize.
The controlling shareholder in local lender Banco de Oro, the Sy family, also tapped the market in January, raising approximately $100 million through an issue of global depositary receipts.