THE Philippines made a successful return to the global debt market on Tuesday, raising $2 billion from a two-part dollar bond sale that the government said was enthusiastically received by investors.

The 10- and 15-year fixed rate bonds, both new issuances, followed last December's $1-billion 5.5-year sukuk offering and a triple-tranche bond sale at the start of 2023 that raised $3 billion.

"The enthusiastic response we saw from the global investor community for this offering underscores the strength of the Philippine economy and the strong vote of confidence international investors have in President Ferdinand R. Marcos, Jr.'s sound economic and fiscal policies," Finance Secretary Ralph Recto said in a statement on Wednesday.

The 10-year tranche was priced at T+80 basis points, which the Treasury said reflected a 40-bps tightening from the initial guidance, while the 25-year bonds — issued under the government's sustainable finance framework — were priced at 5.6 percent at par, 45 bps tighter than guidance.

"We secured funding from the market at very cheap rates, which allowed us to save on borrowing costs," Recto said.

"The 10-year spread has been the tightest among all our similar issuances since 2022, while the 25-year sustainability tranche achieved the second-best rate in the government's history," he added.

"The tight pricing, especially compared to higher-rated peers, serves as an indication of the country's exceptional performance beyond its current credit rating and makes a good case for a rating upgrade."

Fitch on Tuesday said that it had assigned a "BBB" rating, with a stable outlook, to dollar bond offering.

This was in line with the country's investment-grade rating, also with a stable outlook, that was last affirmed in November last year.

S&P Global and Moody's, meanwhile, respectively assigned ''BBB+" and "Baa2" ratings, both also in line with the Philippines' investment-grade status.

Settlement for the dual-tranche offering has been set for May 14, 2024, and the bonds will mature on May 14, 2034 and May 14, 2049.

The Treasury said the government had capitalized on improved market sentiment after US labor market data US eased worries about the Federal Reserve rate trajectory.

"The success of the offering illustrated the Republic's ability to navigate an uncertain policy rate environment and respond efficiently to capture conducive market conditions," it added.

The offering was said to have attracted strong demand and interest from a diverse set of "high-quality accounts."

"The strong reception and record tight pricing levels ... reaffirms the Philippines' position as a true watermark for quality emerging market credit stories," National Treasurer Sharon Alamanza said.

Proceeds from the 10-year bonds will be used for general financing purposes, while those from the 25-year sustainability tranche will go to general financing/refinancing and spending that is in line with the sustainable finance framework.

Recto said the funds would be "directed toward the overall welfare of all Filipinos — more infrastructure projects, improved social services, a better health care system and quality education for them."

Bank of America, Citigroup, HSBC, JP Morgan, Morgan Stanley, Standard Chartered and UBS acted as joint bookrunners for the transaction.

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