RP guns for US$900m euro-denominated bonds

RP guns for US$900m euro-denominated bonds

HONG KONG (Dow Jones): Asia is set to see its fifth euro- denominated offering, with the Republic of the Philippines planning to raise the equivalent of US$900 million in euro- denominated bonds.

A roadshow for the bonds, expected to be seven or 10 years in maturity, started on Monday in Europe, with pricing to take place after April 14.

The Philippines' euro deal closely follows Korea Development Bank's 500 million euro five-year note issue last month. Those were priced at 120 basis points over German bunds.

This month's issue is the Philippines' second euro-denominated financing. In March 1999, the sovereign raised 350 million euro in 5.5-year floating rate notes.

Meanwhile, government-owned Singapore Power is expected to price its US$300 million five-year bonds at the end of the week. The bond issue, rated triple-A by Standard & Poor's Corp., is the utility's first foray overseas and is expected to set a U.S. dollar benchmark for the city state.

Otherwise, few other Asian entities are brave enough to test the volatile markets. After widening up to 70 basis points over the course of the previous week, Asian benchmark bonds staged a small recovery late last week.

For example, Korea 2008 was indicated at 228 basis points over Treasurys, 13 basis points wider than a week earlier but narrower than Thursday's 240 basis points.

Midweek, DBS priced $500 million Rule 144a 10-year global subordinated notes, after pricing was delayed by three days. The paper carried a 7.785 percent coupon and was priced to yield 216 basis points over Treasurys or 87.5 basis points over dollar Libor.

Although the spread over Treasurys was wider than the sub-200 level eyed when the deal first emerged, it was deemed successful since the spread over Libor was 10 basis points tighter than the pricing on DBS' US$750 million deal last year. The offering was lead-managed by Morgan Stanley Dean Witter, Goldman Sachs and DBS.

In the local markets, the Inter-American Development bank launched a total of HK$1.5 billion in two note issues. Three-year notes amounting to HK$1.0 billion were priced at 100.25 with a 7.3 percent coupon, in a public issue. Another HK$500 million was raised in a five-year private placement. HSBC served as sold bookrunner for both deals, while BOCI Capital Ltd. was co-lead manager on the public offering.

Separately, Malayan Banking issued HK$500 million in three- year notes at a spread of three-month Hibor plus 60 basis points; Bank of Tokyo Mitsubishi, Hong Kong branch, privately placed HK$320 million in two-year certificates of deposit with a coupon of one-month Hibor plus 27 basis points, according to IFR Asia.