Philippine energy giant Petron Corporation priced this year’s second international peso bond late on Wednesday -- a Ps20 billion $469 million seven-year bond with a 7% semi-annual coupon and yield. The deal was issued and reoffered at par and comes after the Philippine sovereign's successful Ps44.1 billion global peso bond in September.
The Reg-S peso eurobonds, which are denominated in Philippine pesos but settled in US dollars, work better for the issuer than conventional dollar bonds since the swap market in pesos is fairly illiquid. And a domestic peso issue would be subject to 20% withholding tax, which makes them unfavourable for international investors.
In addition, Ps20 billion is a considerable size...
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