S&P: Philippines bond BB+

Standard & Poor's said it assigned a BB+ debt rating to a peso-denominated senior unsecured global bond issued by the Republic of the Philippines.

The bond matures in 2022.

S&P also assigned an axBBB+ Asean regional scale rating to the bond.

The agency said it equalized the rating on the bond with the foreign-currency sovereign rating on the Philippines. The bond represents direct, unconditional obligations of the sovereign. It ranks pari passu with the government's other external commercial debt obligations, S&P said.

All principal and interest payments will be made in dollars with the dollar amount payable calculated according to the average representative market exchange rate for five business days immediately prior to the time the payments are due. Therefore, bondholders bear the exchange-rate risk and the global peso bond contributes to the government's objective of further reducing exchange-rate risk to the sovereign's debt profile, S&P said.

The proceeds will be used to repurchase selected dollar- and euro-denominated debt with the aim of further reducing the Philippines' foreign-currency denominated debt, which is currently about 38% of its total debt, the agency said.

The ratings encompass the country's relatively low income level, weak fiscal profile and high public debt and interest burden, S&P said.

These constraints are balanced by a robust external profile, highlighted by a net external creditor position and strong liquidity ratios, the agency said, as well as a track record of moderately strong growth with low variability.

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