The Republic of the Philippines (RoP) on January 19 priced its first offshore bond under the new administration of President Rodrigo Duterte, which also saw the sovereign simultaneously conducting its trademark liability management exercise.

The RoP sold US$500 million in new bond for 25 years, which was priced at par with a yield of 3.70% - or 25bp tighter than the initial guidance of 3.95% area. This was the tightest priced long-dated global bond offering ever issued by the sovereign on a spread basis, while matching the record low yield that it achieved in February 2016, when it printed a US$2 billion offering, also for 25 years.

The successful issuance was in conjunction with a one-day accelerated switch tender offer for 14 series of US dollar bonds, maturing between 2019 and 2037, and amounting to US$19 billion in total notional value. Bonds with a total notional value of US$3.56 billion were submitted for the switch tender offer, and the RoP accepted a market value of US$1.5 billion from the submissions. Holders who tendered their bonds were given priority to subscribe to the new issue.

The new bond issue generated an order book of about US$4.5 billion, with 43% allocated in Europe, 33% in Asia, and 24% in the US.

The RoP executed a similar accelerated one-day switch tender offer and a new bond issue in February last year, targeting 16 series of bonds with a notional value of US$21 billion. Bonds with a total notional value of US$5.6 billion were submitted for the tender offer and the sovereign accepted a market value of US$1.5 billion, while pricing a new US$2 billion bond.

Proceeds from the latest bond issue will be used for general purposes, including budgetary support. Citi, Credit Suisse, Deutsche Bank, Standard Chartered and UBS acted as joint global coordinators, deal-managers and bookrunners for the transactions.