Tuesday, March 5, 2024

PH Raises USD1 Billion From Sukuk Bond Sale

PH Raises USD1 Billion From Sukuk Bond Sale

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The Philippine government on Thursday successfully raised USD1 billion from the sale of its maiden Sukuk bonds or Islamic bonds.

“The maiden issue was met with strong demand, with the order book’s oversubscription peaking at 4.90 [times],” said the Bureau of the Treasury (BTr) in a statement on Thursday.

“The transaction attracted strong interest, not only from a wide range of high-quality Islamic investors but from others as well, showcasing investors’ confidence in the Republic’s credit profile,” it added.

The Sukuk, with an issuance size of USD1 billion, a tenor of 5.5 years, and an interest rate of 5.045 percent, marks the first time the Philippines has tapped the global Islamic financial markets in this structure.

The BTr said the maiden Sukuk issuance is part of the government’s agenda to promote the development of Islamic banking and finance in the country.

“The Sukuk issuance allows the Republic to diversify its global investor base and tap on Islamic-focused investors across the Middle East and marks the establishment of an active, liquid reference curve for other Philippine issuers to access the Sukuk market in the future,” said the Treasury.

The Sukuk issuance comes after the Investor Roundtable in Doha and the Philippine Economic Briefing in Dubai in September 2023, supplemented by a successful roadshow on November 27 and 28.

The BTr said the transaction illustrates the Republic’s ability to leverage the stable market conditions and access the international capital markets.

Department of Finance Secretary Benjamin Diokno, for his part, said the success of the inaugural Sukuk issuance affirms the Philippines’ significant standing in the international capital markets and underscores investors’ conviction in the country’s financial inclusion agenda.

“We hope this transaction will create positive momentum for Islamic banking and finance in the Philippines, and we look forward to the active participation of all stakeholders,” he said.

The net proceeds of the certificates received will complete the country’s external commercial funding this year which will be used for general purposes, including but not limited, to budgetary support. (PNA)