Philippines plans benchmark dollar notes due 2021 and tap of 6 3/8% bonds due 2034

By Christine Van Dusen

Atlanta, Sept. 20 - The Republic of the Philippines is planning a benchmark-sized issue of dollar notes due Jan. 15, 2021 and a tap of its existing 6 3/8% bonds due Oct. 23, 2034 as part of an exchange offer, according to a market source.

The two issues are being offered in exchange for an array of existing bonds and the sovereign may also sell bonds for cash.

If the Philippines issues any of the new 2021 bonds, the combined amount from the exchange and the cash sale will be at least $500 million.

There is no minimum for the 2034 bonds since there is already $1.85 billion outstanding.

In total, no more than $3 billion of new bonds will be issued.

The 2021 notes are set to yield Treasuries plus 149 bps to 164 bps, and the add-on is being talked at Treasuries plus 148 bps to 163 bps.

Citigroup, HSBC and UBS are the joint dealer-managers for the transaction, which aims to exchange $3 billion from $17.7 billion of the sovereign's outstanding global bonds.

The new issue is expected to price on Sept. 29.

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