Philippine 10-Year Bonds Rise on Debt Exchange; Peso Declines

Philippine 10-year bonds rose, pushing yields to a one-week low, after the government said it would sell similar-maturity notes at a lower yield as part of a debt swap. The peso fell.

The government will offer a minimum coupon of 5.875 percent on the 10-year bonds it will exchange for shorter-dated securities, the Bureau of Treasury said in a statement on its website today. It set a minimum rate of 8.125 percent on 25-year debt.

“The pricing is good,” said Marcelo Ayes, senior vice- president for treasury at Rizal Commercial Banking Corp. in Manila. “The yield that was set was lower from yesterday, so there was some buying.”

The yield on the 6.125 percent note due September 2020 dropped 7.5 basis points to 5.875 percent as of 3:04 p.m. in Manila, according to Tradition Financial Services.

The government aims to swap at least 30 billion pesos ($683 million) of securities due in 2020 and the same amount of bonds maturing in 2035, the Treasury said yesterday.

The peso slipped 0.1 percent to 43.83 per dollar, according to prices from inter-dealer broker Tullett Prebon Plc.

To contact the reporter for this story: Karl Lester M. Yap in Manila at kyap5@bloomberg.net.

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net.