Philippines begins Dutch auction tender offer for 16 series of bonds

By Angela McDaniels

Tacoma, Wash., Oct. 10 - The Republic of the Philippines began a modified Dutch auction tender offer for $17.06 billion and €500 million of its bonds, according to a news release.

The bonds eligible for the offer and their respective minimum clearing prices are noted in the table below.

The republic said its target is to spend $1.5 billion, including accrued interest, on the offer, but it may spend more or less.

The offer will end at 5 p.m. ET on Oct. 13. The settlement date is expected to be Oct. 25.

For each bond accepted, the payment will be a cash amount equal to the clearing price plus accrued interest up to but excluding the settlement date. The payment will be made in the currency in which the bonds are denominated.

Holders may submit either a competitive offer or a non-competitive offer. By submitting a non-competitive offer, holders are agreeing to accept the clearing price set by the republic. Non-competitive offers will be given preference over competitive offers in the auction.

If a series of bonds is subject to proration, then only offers made at the applicable clearing price will be prorated, unless the applicable clearing price is equal to the applicable minimum clearing price, in which case all non-competitive offers will be prorated.

The republic plans to fund the offer with funds available from its Bureau of the Treasury and the proceeds of a $50 million issue of new global bonds. If any 8¾% bonds due Oct. 7, 2016 are purchased in the offer, these purchases will be made using only the proceeds from the new bond offering.

The tender offer is subject to the successful sale of the new bonds, which is conditioned on, among other things, the receipt of approval from the Monetary Board of the Bangko Sentral ng Pilipinas.

The dealer managers are Citigroup Global Markets Inc. (800 558-3745 or 212 723-6108), J.P. Morgan Securities LLC (212 834-4533 or 852 2800-8007), Goldman Sachs (Asia) LLC (800 828-3182, 212 902-5183 or 852 2978-6659), Hongkong and Shanghai Banking Corp. Ltd. (852 2822-4100, 44 20 7991 5874, 212 525-0866 or liability.management@hsbcib.com), Standard Chartered Bank (65 6324-1740, 44 207 885 8888 or Primary.Debt@sc.com) and UBS AG, Hong Kong Branch (852 2971-7238, 203 719-4210, 44 20 7567 0525 or OL-Liability-Management@ubs.com).

Philippines Dutch auction tender offer

Series of bonds Outstanding principal amount Minimum clearing price

9% bonds due Feb. 15, 2013 $799,854,000 $1,100.00

8¼% bonds due Jan. 15, 2014 $1,210,866,000 $1,137.50

8 7/8% bonds due March 17, 2015 $710,659,000 $1,212.50

8% bonds due Jan. 15, 2016 $709,445,000 $1,212.50

8¾% bonds due Oct. 7, 2016 $563.96 million $1,260.00

9 3/8% bonds due Jan. 18, 2017 $798,014,000 $1,282.50

9 7/8% bonds due Jan. 15, 2019 $861,231,000 $1,357.50

8 3/8% bonds due June 17, 2019 $1,237,751,000 $1,285.00

6½% bonds due Jan. 20, 2020 $1.4 billion $1,172.50

7½% bonds due Sept. 25, 2024 $774,204,000 $1,232.50

9½% bonds due Oct. 21, 2024 $480,406,000 $1,407.50

10 5/8% bonds due March 16, 2025 $1,632,885,000 $1,532.50

9½% bonds due Feb. 2, 2030 $2 billion $1,485.00

7¾% bonds due Jan. 14, 2031 $2,384,506,000 $1,295.00

6 3/8% bonds due Jan. 15, 2032 $1.5 billion $1,157.50

6¼% bonds due March 15, 2016 €500 million €1,067.50

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