Moody’s gives ‘Baa2’ to govt’s euro bond offer

MOODY’S Investors Service on Monday assigned an investment grade score on the government’s planned euro debt issuance.

In a statement, the debt watcher said it had “assigned a Baa2 senior unsecured rating to the euro-denominated global bond offering by the Government of the Philippines, maturing in 2027.”

The rating mirrors the Philippines’ issuer rating of Baa2, which Moody’s said was characterized by strong economic performance, a strengthening fiscal position and limited vulnerability to external shocks.

Also on Monday, the Bureau of the Treasury confirmed reports last week that said the country had begun marketing the benchmark euro bond issue, which is typically set at least $500 million.

“Actually, we did not specifically mention an amount in our approvals. We have flexibility to actually go over $500 million if it is advantageous for us,” Deputy Treasurer Erwin Sta. Ana said in an interview.

“[W]e have been planning to go back to the euro market for the longest time. This is part of the DoF (Department of Finance) and Treasury’s strategy to diversify its financing instruments and diversifying investor base,” he added.

Sta. Ana, however, declined to provide further details on the subject, but said pricing for the planned offer would be decided once his bureau round up the deal roadshow this week.

Moody’s move came after another credit ratings agency, S&P Global Ratings, also assigned an investment grade score of ‘BBB’ to the planned debt papers.
The planned euro bond is one of the government’s fundraising efforts in offshore markets.

In January, the government raised $1.5 billion through a 10-year global bond issue, which received a tight spread of 110 basis points over the US Treasuries.

Last August, it raised 154.2 billion yen or $1.39 billion from the issuance of three-year yen-denominated samurai bonds.

This came months after the government raised 1.46 billion renminbi or $230 million from its maiden panda bond issuance in March.

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