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Treasury & Capital Markets
Philippines to launch inaugural sukuk
Issuance aimed at diversifying sovereign’s investor base towards the Middle East and other Islamic countries
The Asset 27 Nov 2023

The Republic of the Philippines (RoP) has mandated a group of international banks to launch the country’s inaugural sukuk offering.

Citi, Deutsche Bank, Dubai Islamic Bank, HSBC, MUFG and Standard Chartered, acting as joint bookrunners and lead managers, will arrange a series of fixed income investor calls in Asia, Europe, the Middle East and the United States commencing on November 27, according to the Philippines' Bureau of Treasury. A benchmark-sized US dollar-denominated Reg S/144A sukuk transaction with a 5.5-year tenor may follow, subject to market conditions.

The certificates will be issued by ROP Sukuk Trust (in its capacity as issuer and as trustee), a special purpose trust formed under the Philippine law and administered by the Land Bank of the Philippines – Trust Banking Group. The certificates are expected to be rated Baa2 by Moody’s Investors Service, BBB+ by S&P Global Rating and BBB by Fitch Ratings.

The RoP is one of the most prolific sovereign issuers of conventional bonds in the G3 bond market in Asia and a sukuk transaction will help diversify its investor base towards the Middle East and other Islamic countries. It previously accessed the conventional US dollar bond market in January this year with a three-tranche offering totalling US$3 billion, including a US$1.25 billion sustainability issuance for 25 years.

The Republic of Indonesia (RoI) has set the tone for sovereign sukuk issuance in Asia as it has regularly tapped this market annually. It last accessed the sukuk market in early November this year with a dual-tranche issuance totalling US$2 billion. The transaction comprised of a five-year conventional sukuk amounting to US$1 billion and a 10-year green sukuk, also for US$1 billion.

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