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Northeast Asia

The Philippines taps samurai market

The Republic of the Philippines returned to the samurai bond market in August, becoming the latest sovereign issuer to tap a yen investor base desperate for yield.

By Morgan Davis

The Republic of the Philippines took advantage of Japanese investors’ hunger for yield when it returned to the samurai market in early August, allowing the sovereign to snag a tightly priced, four-tranche ¥92 billion ($863.4 million) bond.

The transaction was smaller than the Philippines’ 2018 samurai bond trade, which raised ¥154.2 billion from three tranches. That deal marked the sovereign’s return to the Japanese market after an eight-year hiatus.

With its return to yen last week, the country wanted to diversify its investor base and how it approached the market, says a source at the Philippines’ ministry of finance.

“It was a well-received transaction, and investors were pleased,” he adds.

Akihiro Igarashi_JP Syndicate_160x186

Akihiro Igarashi,
Nomura

The southeast Asian nation isn’t the only sovereign to tap the yen market this year. With the likes of Mexico, Malaysia and Indonesia also selling samurai bonds in the last few months, the Philippines found an engaged investor base in Japan.

Japanese investors “are looking for products that offer a decent spread on yield,” says Akihiro Igarashi, head of debt syndicate for Japan at Nomura.