April 11, 2019 / 8:40 AM / 9 days ago

Philippines to issue 6 bln yuan Panda bonds - sources

BEIJING/HONG KONG, April 11 (Reuters) - The Philippines plans to raise 6 billion yuan ($893.54 million) from issuing so-called ‘Panda bonds’ in China, according to three sources with knowledge of the plan on Thursday.

The first tranche, at 3.5 billion yuan and with a tenor of three years, will be marketed with a coupon range of 3.3 percent to 3.9 percent, with Bank of China as the lead underwriter and bookrunner, said the sources.

A separate source at the Philippine government confirmed the issuance plans.

The bond will likely sell after the Holy Week Holiday, which ends on April 20, a treasury official told local media earlier this month.

The bond has been rated Baa2 by Moody’s and BBB by S&P, and will be available to foreign investors via the Hong Kong-based Bond Connect scheme, they added.

The issuer plans to remit the proceeds into its foreign exchange reserves, but may also swap them into Philippine pesos to pay for public expenditure, including for projects linked to the Beijing-led Belt and Road Initiative, said the sources.

Bank of China did not immediately respond to Reuters’ request for comments.

The Philippines debuted in China’s Panda bond market last March, selling a 1.46 billion yuan three-year note at a 5 percent coupon, around the low-end of price guidance.

Carlos Dominguez, the Philippines’ finance minister, said last August that the country will return to the Panda bond market within 12 to 18 months, but had not decided on the issuance size. ($1 = 6.7149 Chinese yuan renminbi) (Reporting by Xiaochong Zhang in Beijing and Noah Sin in Hong Kong; Additional reporting by Karen Lema in Manila; Editing by Shri Navaratnam)

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