ANZ responds positively to Sovereign Bond issuance

ANZ Bank (PNG) Ltd has responded positively to the successful conclusion of the 10-year US Dollar inaugural sovereign bond issuance by the Independent State of Papua New Guinea.

Mark Baker, Managing Director ANZ PNG said: “This marks an important milestone in the history of local financial markets, setting a strong precedent for future issuances in Papua New Guinea.”

It is an important phase in the evolution of an emerging economy and will go a long way in establishing PNG’s identity in global financial markets.

“What has been a particularly encouraging feature of this issuance has been the quality of investor base (99% consisting of Asset & Fund Managers and Insurance and Pension Funds) and that the majority of the investor base (83%) has come from the US and European markets, which highlights the level of global attraction that PNG has garnered by way of this issuance,” Mr Baker said.

With the country facing some economic headwinds and ongoing uncertainties in global financial markets, an oversubscription of the issuance by over 7 times is a testimony of the strong belief that the international investors have in PNG’s potential and growth story.

In addition, acceptance of a 10 year tenor for an inaugural issuance by a sovereign rated B2/B is seen as a positive signal from international investors.

“The bonds have performed strongly in secondary trading post the issuance, and we have observed strong buy interest from investors which is natural given the high level of oversubscription and demand,” Mr Baker said.

Sovereign bond issuances, through international bond markets, are a common way by which countries can diversify their sources of borrowing, in an open manner.

They are an important source of liquidity, and require transparency and fiscal discipline on the part of the Issuer.

“An inaugural issuance can often be challenging, and it is good to see PNG make a successful debut in the international bond market”.