Philippines To Sell Samurai Bonds

Bloomberg reports that the Philippines is planning to sell $1.1 billion in 10-year Samurai bonds (i.e., yen-denominated bonds issued by non-Japanese institutions).

The government may be able to pay a very good rate of 2.24 to 2.34 percent for the bonds. Last July, Indonesia paid 2.73 percent on a comparable issuance. The yield over Japanese government bonds has grown since last summer, and some observers believe that demand is rising for emerging market debt.

Also, a portion of the issuance is reportedly guaranteed by the Japan Bank for International Cooperation.

The sale will comprise a substantial portion of the $2.5 billion that the government hopes to raise overseas in order to to finance a budget deficit that is expected to come in around $6.3 billion. It raised $1.5 billion in 10- and 25-year, dollar-denominated notes last month.