The Republic of the Philippines successfully launched today a JPY 35 billion 3.2 percent coupon Samurai bond offering due 2005. The issue generated extremely wide participation from institutional investors and retail accounts. The issue was jointly lead-managed by Daiwa Securities SB Capital Markets and Nikko Salomon Smith Barney.
This Samurai offering marks the successful return of the republic of the Philippines to the Japanese capital markets from its last foray in 1996. This financing continues a string of successes achieved by the republic in its ongoing foreign borrowing program. Funds raised from the offering will finance general budgetary requirements, including the financing of approved projects in the country.
Finance Secretary Jose T. Pardo said, “I am extremely pleased that we have obtained attractively priced financing - - cost savings we can use for much needed programs at home. The successful offering confirms the confidence of the international community in the Philippines and highlights the strong economic fundamentals of the country.” A highly effective road show was conducted by senior representatives of the Republic of the Philippines’ Department of Finance and Bangko Sentral ng Pilipinas. Leading the delegation was Joel Bañares, Undersecretary of Finance who observed, “The republic has decided to draw on the Japanese capital markets at this time given the broad investor base and attractive funding levels relative to our us or Euro alternatives.” Earlier this year, the republic tapped the global capital markets with a US$ global bond offering.
“The success of the issue was achieved by satisfying the higher absolute coupon requirement of Japanese regional as well as retail investors. As a result, the republic achieved funding at more attractive levels than could have been obtained in the U.S. or Euro markets,” noted Tatsuro Higashi, head of debt capital markets at Nikko Salomon smith barney. “The offering was successfully launched despite current skittishness in the Japanese capital market and continued uncertainty in the rest of the global capital markets,” he added. “The successful completion of the transaction clearly demonstrates Japanese investor confidence in the Philippine credit and paves the way for future offerings by the Republic and other issuers from the country”, said Mr. Shintaro Hayakawa, head of international finance department at Daiwa Securities SB capital markets.