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JBIC to Guarantee Philippines’ Privately Placed Samurai Bond Issues
Supporting Funding in Japanese Bond Market

  • Region: Asia
  • Others
  • Guarantees
NR/2009-67
February 17, 2010
  1. The Japan Bank for International Cooperation (JBIC; President & CEO: Hiroshi Watanabe)*1 signed on February 16 a framework agreement with the Government of the Republic of the Philippines. Under this agreement, JBIC will provide a guarantee totaling up to 100 billion yen for yen-denominated foreign bonds to be issued by the Philippine government in the Japanese bond market (Samurai bonds).*2 This is the first support JBIC has offered to the Philippine government for Samurai bond issuance.  JBIC will provide a guarantee within this specified amount in the agreement.
     
  2. JBIC signed in June 2009 a memorandum of understanding (MOU) aimed at facilitating Samurai bond issuance with the Philippine government. *3 Since then, both parties have engaged in a series of discussions on financial support under the Market Access Support Facility (MASF) of JBIC.*4 And these efforts have led to the signing of this framework agreement. This is the second framework agreement after the Republic of Indonesia*5 with an Asian country under the MASF.
     
  3. The Philippine government has achieved steadfast national economic growth through prudent macroeconomic management. In the global financial turmoil, the government has taken a variety of fundraising measures in an effort to ease its impact on the country's economy.
     
  4. This Samurai bond issuance is part of these measures, with JBIC's credit enhancement helping diversify its funding sources. Since 1978, the Philippines has raised funds with seven Samurai bond issues. This framework agreement will make way for the Philippine government's first Samurai bond issue since the last issue in 2001. This issuance will increase the presence of Philippine sovereign bonds in the Tokyo bond market. JBIC's support for Samurai bond issues in the Tokyo bond market will also offer a wide range of investment opportunities to Japanese investors, thereby being expected to invigorate the Samurai bond market.
     
  5. "Responding to disruptions in financial order in the international economy" is one of the functions JBIC performs in its mission. Therefore, JBIC has been responding to the global financial squeeze since 2008 by drawing on its range of financial instruments and actively launching financing initiatives.
Note
  1. *1 JBIC is the international wing of the Japan Finance Corporation (JFC; Governor: Shosaku Yasui).
  2. *2 Samurai bonds are yen-denominated bonds issued by a foreign government or company in the Tokyo bond market.
  3. *3 See Press Release on June 19, 2009.
  4. *4 The MASF supports Asian countries by providing guarantees up to 500 billion yen for their yen-denominated bond (Samurai bond) issues.  See Information on May 18, 2009.
  5. *5 See Press Release on July 27, 2009.
  6.  

 

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