The government announced yesterday the details of its new US dollar Global Bond offering consisting of a "new cash offering" and exchange and tender offers for outstanding Yankee bonds of the National Power Corp.
According to the Department of Finance, the Global bonds will consist of two tranches due 2010 and 2025.
The minimum size of each tranche, including bonds issued pursuant to the exchange and to tender offers will be $500 million.
The DOF said it will utilize $500 million to invest in debt securities to be issued by Napocor. Essentially, the government would be borrowing in behalf of Napocor. The other $500 million will be used to finance the government's other activities or for budgetary needs.
In addition to the new cash offering, the government will also exchange new Global bonds for $500 million of outstanding Napocor Yankee bonds (which are due Dec. 15, 2006 and May 15, 2028) and to tender for $160 million of outstanding Napocor bonds.
The tender offer will be funded by the Global bond offering.
The tender and exchange offers will be priced on a fixed spread basis to the relevant Global bond offering.
Specifically, the Napocor Yankee bonds, which carry a rate of 7-7/8 percent guarantee bond due in 2006, will be priced relative to the yield of the Global bonds due 2010 plus zero basis point.