THE Philippines is looking to raise at least $400 million from its first-ever retail dollar bond offering, as part of efforts to beef up state coffers for its pandemic response.
The Philippines will set the pricing for the dual-tranche offering of retail onshore dollar bonds (RODBs) on Wednesday, according to a notice posted on the Bureau of the Treasury’s (BTr) website.
The government aims to raise $200 million each from the five-year dollar-denominated bonds and 10-year notes.
The public offering will run from Sept. 15 to Oct. 1.
However, the BTr said it can choose to adjust the offer period and the offer volume as necessary.
Investors can buy the dollar-denominated bonds for a minimum investment of $300 (P15,000), and multiples of $100 thereafter.
The country’s first-ever onshore RODBs aim to provide alternative and safe investment opportunities for retail investors, especially overseas Filipino workers (OFWs).
The BTr initially planned to offer RODBs in mid-August but decided to postpone it after Metro Manila was placed under the strictest form of lockdown due to a spike in coronavirus cases.
“I think there will be strong demand since market is actively looking for investment outlets,” a bond trader said via Viber.
The BTr said the final interest rate of each tenor will be determined through a Dutch auction on Wednesday, based on the prevailing market rates for five-year and 10-year Republic of the Philippines (RoP) tenors.
The debt papers will be settled on Oct. 8 and will be listed and traded on the Philippine Dealing and Exchange Corp.
To attract more investors, the Treasury and its partner banks agreed to remove the maintaining balance of dollar accounts that will be used to buy the securities.
The bonds can be purchased through various online platforms such as the BTr’s online ordering facility, Bonds.PH mobile app, and the Overseas Filipino Bank mobile app.
The government last offered onshore dollar-denominated bonds in December 2012, when it raised $500 million in 10.5-year bonds from $1.7 billion in total tenders. The issuance, however, was only available to institutional investors due to high minimum investment requirement.
The RODB is similar to the peso-denominated retail Treasury bonds (RTBs) that the government offers every year to cater to small local investors.
In March, the BTr raised P463.3 billion in three-year RTBs to mark its second-biggest retail bond sale in history, following the record P516.3 billion sold in five-year papers last year.