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DBP wins IHAP 2016 Deal of the Year


The Bureau of the Treasury’s RoP Liability Management deal jointly managed by the Development Bank of the Philippines (DBP) and other banks was awarded deal of the year at the Investment House Association of the Philippines (IHAP) Awards 2016 on March 2, 2016.

The Republic of the Philippines closed on 9 September 2015 this domestic liability management transaction.  DBP was one of eight mandated Joint Deal Managers yet delivered more than its share to the success of the transaction.

DBP brought in 27.51% of total submissions for exchange of eligible bonds and 16.32% of total submission for new subscription.  Considering that there were a total of eight JDMs appointed for the transaction, DBP brought in significantly more than its share into the transaction. The quality of the offers were further demonstrated when no less than 20.8% of the final offers accepted came from those coursed through DBP.

The transaction saw a tremendous response from the market with total tenders of eligible bonds amounting to P388-billion, representing an oversubscription of at least 3.88x for the total transaction. The strong response also allowed the Republic to price the new bonds at the minimum coupon rates it had earlier set.

In his press statement, Finance Secretary Cesar V. Purisima said, “The transaction has helped the Republic achieve its debt management objectives while also providing investors with new benchmark bonds in exchange for illiquid bonds.  With the introduction of two tranches of exit bonds this year, the Republic showed that it will continue to provide innovative solutions in line with investors’ needs.”

Treasurer of the Philippines Roberto B. Tan added, “We are very pleased with the overwhelming response of the market and the continued support from investors. The result, achieved amidst significant volatility in broader emerging markets, is further testament to the strong economic fundamentals of the Philippines.”

With the backdrop of possible rising interest rates, the Republic required a very tight timeline of just five weeks from mandate award to closing.  Needless to say, this required the deal team (composed of a cross section from DBP’s Capital Markets, Treasury Marketing, ALM, Fixed Income Trading and Correspondent Banking teams within DBP’s Financial Resource Sector as ably supported by DBP’s Legal Services Group) to work beyond regular hours to ensure that this tight timeline and the client’s requirements were met.  The successful conclusion of the transaction is testament to the best practices of DBP’s employees:  dedication, teamwork and client centricity to ensure that the task is done and done well.