Philippines says aims to launch debt swap next week

MANILA: The Philippines hopes to launch its planned local bond swap next week after delays in documentary approvals pushed back the offer originally targeted for Tuesday, a senior government official said.

The government had said it wanted to swap shorter-dated local bonds for new 10-year and 20-year on June 28, with the offer period to be closed in the first week of July, and settlement a week after.

"We will have to reschedule the launch. If we get the approval (from the Office of the President) this week, the launch can happen next week," Deputy Treasurer Eduardo Mendiola said.

On Monday, National Treasurer Roberto Tan said the Treasury had obtained an opinion from the central bank supporting the planned debt exchange.

Manila is taking advantage of strong investor interest in emerging markets to lengthen its debt maturity profile.

The Philippines issued around 185 billion pesos ($4.2 billion) of new 2020 and 2035 benchmark bonds via its largest domestic swap in December. It also raised 15 billion pesos from the same offer.

First Metro Investment Corp , BPI Capital Corp, SB Capital Investment Corp and Citibank are joint deal managers of the latest debt swap, along with state lenders Development Bank of the Philippines and Land Bank of the Philippines.

Following swaps of local and foreign currency debt in the second half of last year, the Philippines' average debt maturity lengthened to 8.8 years at end-December from 7.9 years in June 2010, with the average foreign debt maturity at 11.4 years.

Last week, Fitch upgraded the Philippines credit rating to one notch below investment grade, one notch higher than ratings by Standard and Poor's and Moody's Investors Service, which had raised its rating on June 15.

Copyright Reuters, 2011