By Angela McDaniels
Tacoma, Wash., Sept. 29 - The Republic of the Philippines said it received tenders for $4,446,955,000 principal amount of bonds in an exchange offer that ended at 5 p.m. ET on Sept. 28.
The republic expects to issue $2,041,744,000 principal amount of new dollar-denominated global bonds due 2021 and $949,615,000 principal amount of reopened 6 3/8% global bonds due 2034 in the offer.
The republic also determined pricing for the bonds to be issued in the exchange and announced plans to issue $200 million principal amount of the new bonds due 2021 for cash.
The new bonds will have a 4% coupon and maturity date of Jan. 15, 2021. The new issue price is 99.248, and the yield is 4.091%.
The new issue price was set using 155 basis points over the mid-market U.S. dollar interest rate swap rates for the maturities occurring immediately before and immediately after Jan. 15, 2021.
The reopening price for the reopened 6 3/8% bonds is 114.879 for a yield of 5.276%. The price was set using the yield to maturity corresponding to the bid-side price of the U.S. Treasury 4.375% bond due May 15, 2040 plus 160 bps.
Previously, the republic issued $1 billion of the 6 3/8% global bonds on Oct. 23, 2009 and $850 million on Jan. 13, 2010. The new reopened bonds issued in the exchange will form a single series with those previously issued.
Holders who exchanged bonds in group A could chose to receive either new bonds or reopened bonds, and holders who exchanged bonds in group B will receive reopened bonds.
The following bonds are included in group A:
• $1,484,215,000 of 8 3/8% bonds due Feb. 15, 2011;
• $948,383,000 of 9% bonds due Feb. 15, 2013;
• $1,601,622,000 of 8¼% bonds due Jan. 15, 2014;
• $976,414,000 of 8 7/8% bonds due March 17, 2015;
• $1.3 billion of 8% bonds due Jan. 15, 2016;
• $629,703,000 of 8¾% bonds due Oct. 7, 2016; and
• $822,381,000 of 9 3/8% bonds due Jan. 18, 2017.
The bonds in group B are:
• $962,468,000 of 9 7/8% bonds due Jan. 15, 2019;
• $1.5 billion of 8 3/8% bonds due June 17, 2019;
• $774,204,000 of 7½% bonds due Sept. 25, 2024;
• $480,406,000 of 9½% bonds due Oct. 21, 2024;
• $1,854,744,000 of 10 5/8% bonds due March 16, 2025;
• $2 billion of 9½% bonds due Feb. 2, 2030; and
• $2,384,506,000 of 7¾% bonds due Jan. 14, 2031.
The exchange ratio for the new bonds is noted in the tables below and is equal to the old bond exchange value divided by the new issue price or reopening price, as applicable.
The old bond exchange value is a price per $1,000 principal amount that results in a yield equal to the reference yield plus a spread of negative 165 bps to positive 155 bps that depends on the bonds series.
The reference yield was four-month Libor for the 8 3/8% bonds in group A, the dollar swap rate for all other series in group A and the reopening yield of the reopened bonds for the group B bonds.
Those exchanging bonds due 2030 and 2031 will receive a special cash payment of $207 and $167 per $1,000 principal amount, respectively, in addition to new bonds. For these bonds, an amount equal to the special payment was subtracted from the old bond exchange value.
Citi, HSBC and UBS Investment Bank were the joint dealer managers.
The information agent was Bondholder Communications Group, LLC (attn: Ruth Perez at rperez@bondcom.com; 212 809-2663 or 44 20 7382 4580).
Philippines bonds accepted in exchange for new 4% bonds
| Old bonds | Amount accepted | Exchange ratio | Proration factor
|
| 8 | 3/8% bonds due 2011 | $198,227,000 | 1.0363 | 100%
|
| 9% bonds due 2013 | $144,437,000 | 1.1965 | 100%
|
| 8¼% bonds due 2014 | $390,484,000 | 1.2191 | 100%
|
| 8 | 7/8% bonds due 2015 | $264,757,000 | 1.3007 | 75%
|
| 8% bonds due 2016 | $605.38 million | 1.2937 | 100%
|
| 8¾% bonds due 2016 | $44,158,000 | 1.3568 | 100%
|
| 9 | 3/8% bonds due 2017 | None | 1.3913 | Zero
|
|
|
| Philippines bonds accepted in exchange for reopened 6 | 3/8% bonds
|
| Old bonds | Amount accepted | Exchange ratio | Proration factor
|
| 8 | 3/8% bonds due 2011 | $17,072,000 | 0.8953 | 100%
|
| 9% bonds due 2013 | $4,092,000 | 1.0337 | 100%
|
| 8¼% bonds due 2014 | $17,144,000 | 1.0532 | 100%
|
| 8 | 7/8% bonds due 2015 | $11.37 million | 1.1237 | 100%
|
| 8% bonds due 2016 | $86,893,000 | 1.1176 | 100%
|
| 8¾% bonds due 2016 | $21,589,000 | 1.1722 | 100%
|
| 9 | 3/8% bonds due 2017 | $24,367,000 | 1.2020 | 100%
|
| 9 | 7/8% bonds due 2019 | $99,278,000 | 1.2563 | 100%
|
| 8 | 3/8% bonds due | 2019 | $261,242,000 | 1.1687 | 100%
|
| 7½% bonds due 2024 | None | 1.1405 | Zero
|
| 9½% bonds due 2024 | None | 1.3144 | Zero
|
| 10 | 5/8% bonds due 2025 | $225,619,000 | 1.4073 | 100%
|
| 9½% bonds due 2030 | None | 1.1579 | Zero
|
| 7¾% bonds due 2031 | None | 1.0122 | Zero
|
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