Investors and the Department of Finance (DOF) swapped P292.5 billion worth of domestic bonds, the largest transaction of its kind in the country’s history.
“The transaction achieved cashflow and debt service relief of P152.6 billion in the medium term, which the government may channel to its infrastructure and socio-economic projects," the DOF said.
Offers exceeded accepted tenders by P31 billion. The bond swap stretched the average maturity of accepted bonds from 5.48 years to 18.01 years. It was only the second bond swap of the Aquino administration and the sixth the DOF has ever completed.
The bond swap is part of the DOF’s efforts to improve its debt maturity profile and set liquidity benchmarks at the long end of the yield curve.
“The success of this bond exchange will further strengthen the fiscal position of the Republic as short and medium term debt will be swapped for longer dated securities. It also reaffirms the growing investor confidence in the country’s long term prospects," Purisima said.
Joint deal coordinators for the bond exchange were the Development Bank of the Philippines and Land Bank of the Philippines. First Metro Investment Corp., BPI Capital Corp., Citicorp Capital Philippines Inc. and SB Capital Investment Corp. were the private institutions that took part in implementing the swap. — ELR/VS
