First Holdings arm to issue $100-M Euro notes

First Gen International (FGI), a subsidiary of the First Philippine Holdings Corp. (FPHC), will issue $100-million in Euro-notes, the proceeds of which will be used to infuse capital in existing power projects of the Lopez Group.

In a disclosure to the Securities and Exchange Commission (SEC), FGI said the issuance of the notes will be launched by end March at Cayman Islands, and listed on the Luxembourg Stock Exchange.

FGI said the notes will mature three years from the issue date or in 2003. Based on current market conditions, FGI said the notes could be successfully placed at an interest rate of 1.7 percent to 1.8 percent over the six-month LIBOR rates. The accrued interest will be payable semi-annually and will be calculated on an actual 360-day basis.

FGI has appointed as its listing agent, the Banque International Louxembourg S.A.; its trustee, Chase Manhattan Trustees Ltd.; registrar and principal playing agent, Chase Manhattan Bank in London.

FGI said the notes that will be guaranteed by FPHC, will be used to bankroll the 500-megawatt San Lorenzo power project, and for future investments and/or acquisitions of land for the 1,000-MW Sta. Rita power project, the 65-MW Santo Tomas co-generation facility and Phase I of the North Luzon Expressway project.

Part of the proceeds will also be used for acquisition of further shares in the Bauang Private Power Corp. and for working capital.

The issuer, FGI, was incorporated in Cayman Islands to facilitate the offering of the notes and has no subsidiaries.

FPHC on the other hand, is the holding company of the Lopez family to concentrate its investments in the energy sector in the country. The company also has investments in companies with interest in property development, infrastructure, construction, refined petroleum pipelines and manufacturing.

FPHC is seeking to become the premier energy firm in the Philippines. Its strategy is to focus on, and expand, its primary-related businesses such as power generation and power distribution. The consolidated revenues of FPHC have been derived primarily from its share in the net earnings of Manila Electric Co., its affiliate which is engaged in power distribution, and from gains on the sale of Meralco shares. Its other sources of revenues are from contracts and services from its service business subsidiaries such as First Philippine Industrial Corp. and sales of its manufacturing subsidiaries such as Philippine Electric Corp.