Developing-nation dollar bonds have rallied this year, pushing the extra yield investors demand to own the debt over U.S. Treasuries to 4.50 percentage points from 6.90 points at the start of the year, according to JPMorgan Chase & Co.'s EMBI+ Index. The spread over Treasuries has widened from as low as 4.07 points on June 10, indicating that investors' appetite for risks is waning.
"The fiscal situation in the region as a whole is more of a concern now," said Vishnu Varathan, a regional economist at Forecast Singapore Pte. "India highlighted the situation. Economies in the region have a huge impetus to raise funds."
The Philippines plans to sell up to $750 million of dollar bonds to plug a record budget deficit, its second overseas debt issuance this year.
The government hired Citigroup Inc., Credit Suisse Group AG and Deutsche Bank AG to arrange the sale and the securities due January 2020 will be priced today in New York, according to an e-mail sent to investors. The bond will be priced to yield about 6.625 percent, according to people familiar with the sale, who asked not to be identified.
The government is turning to global investors for funds after falling tax revenue and rising economic stimulus spending forced it to revise the budget deficit target three times this year. Emerging-market bond funds have recorded 13 consecutive weeks of net inflows as the world credit crisis eased, according to Cambridge, Massachusetts-based research firm EPFR Global.
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