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BTr: New panda bond offer this week

May 15, 2019

THE Bureau of the Treasury (BTr) said it was ready to launch this week the government’s second panda bond offering if market conditions permits.

“The Treasurer has mentioned we may go ahead this week if there is an opportunity… Its really up to market conditions if we are going to,” Deputy Treasurer Erwin Sta. Ana said in an interview on Tuesday.

According to him, the bureau is closely watching the developments of the ongoing trade war between the United States and China.

“Obviously we are in the middle of retaliatory action between the US and China, so we will closely monitor what is happening, as it affects the Chinese interbank market” he said.

“We will see how the benchmark moves in the next couple of hours or days,” the official added.

For the offering, Sta. Ana said the BTr wass looking to issue about 2.5 billion reminbi.

Panda bonds are yuan-denominated debt sold in China by a non-Chinese issuer.

In March last year, the Philippines became the first Association of Southeast Asian Nations member to issue these bonds.

The government’s maiden three-year panda bond issuance was successful, given strong investor demand.

The 1.46-billion-renminbi ($230-million) offering was more than six times oversubscribed, with the order book reaching 9.22 billion renminbi.

It fetched a coupon rate of 5 percent with a tight 35 basis points spread above the benchmark.

The issue has been rated “AAA” by China Lianhe Credit Rating Co. Ltd., factoring in the strong economic ties between Manila and Beijing and the Duterte administration’s “stable source of payment from growing government revenues.”

The Philippines set a record in the panda bond market as almost 90 percent was cornered by offshore or overseas buyers, with overwhelming demand pushing the coupon rate to its lowest at 5 percent.

Credit belongs to : www.manilatimes.net

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