Philippines'25-year global bond offer heavily oversubscribed

The Philippines' 25-year, dollar-denominated global bond issue has attracted around $10 billion of orders so far, well above the target offer, but Manila is not keen to increase the size of the issue, a source said on Wednesday.
The Southeast Asian country is returning to overseas debt markets early in the new year to take advantage of investors' improved risk appetite after global markets began 2012 with gains.
"The global bond offer has been launched," Rosalia de Leon, head of the Finance department's international finance group, told Reuters in a phone interview.
The exact size of Asia's first sovereign debt offer in the overseas market this year would depend on the bookbuilding process, but Manila has authority to sell only up to $1.5 billion of the bonds.
"The (order) book is already at $7.7 billion," said one source who is close to the deal but asked not to be quoted while the offer is open. He later said the book had increased to about $10 billion.
Another source said the actual oversubscription may dwindle later in the day if investors do not accept the final coupon Manila would set for the bonds.
Guidance on the global bonds was initially set at the 5.25 percent area by lead underwriters, according to a report by IFR, a Thomson Reuters service. The guidance was later adjusted to 5-5.1 percent, debt traders said.
The guidance offers a premium of around 330 basis points over 10-year US Treasuries. Final pricing is expected to be made in New York later on Wednesday.
By comparison, investment-grade-rated Italy pays a 6 percent coupon on its 20-year bonds, with yields on its benchmark 10-year debt at 6.89 percent, highlighting the pressures on euro zone borrowers as the region struggles to contain a sovereign debt crisis.
Debt traders said the lower guidance dampened the attractiveness of Manila's global bond, although the issue would likely be fully subscribed with investors awash with cash.
"The Philippines has been known for good timing and it's good economic prospects is the one putting a lot of interest on the bond," said Noel Reyes, deputy head of financial markets at ING Bank in Manila.
"I would hope that they would give more leeway to investors for some capital gains," he said regarding the bond's pricing.