MANILA: The Philippines is preparing to sell at least US$1 billion in bonds, braving a market ravaged by the global financial crisis, a report said Wednesday.

Quoting people familiar with the deal, Dow Jones Newswires said the country - once Asia's most active issuer in the global bond market - is looking to raise between US1 billion and US$1.5 billion.

Manila is offering investors a return of between 8.5 and 8.75 per cent on the 10-year bonds, it added.

The issue would be a key test of investors' appetite for new risk in Asia, and could prompt other regional sovereign issuers to tap the market in the coming weeks, it reported from Singapore.

Manila has also sounded out investors to gauge interest in a fresh offering of paper from reopening its existing 2031 bond, it added.

The Philippines is rated B1 by Moody's Investors Service, BB minus by Standard and Poor's and BB by Fitch Ratings.

Credit Suisse, Deutsche Bank, and HSBC Holdings are said to be the lead managers for the proposed offering, which was likely to be priced during New York trading hours Wednesday.

Last year, Manila raised US$500 million when it reopened its existing 2032 bond, its sole bond offering in 2008.

In all of 2009, the Philippines plans to raise US$2.6 billion in new foreign debt. In addition to the US$1.5 billion in bonds Manila aims to sell, it intends to raise another US$1.1 billion in loans from multilateral lenders such as the Asian Development Bank and the World Bank.

The borrowing will help finance a budget deficit of 102 billion pesos (US$2.2 billion) in 2009 amid an economic slowdown.

- AFP/yb