Gov't defers $700-M Eurobond float

The government has decided to postpone the flotation of another $700-million worth of Euro-denominated bonds despite the completion of a three-day roadshow in Frankfurt, Milan and London, Finance Secretary Jose T. Pardo and Bangko Sentral ng Pilipinas (BSP) Gov. Rafael B. Buenaventura announced yesterday.

According to the two officials, the current market condition is not favorable for a bond offering.

"Since there is no pressure for the government to borrow at this time, the government will probably wait before it undertakes another roadshow and do the offering," they said.

Pardo said the government is looking at the possibility of doing another roadshow in June.

For his part, Buenaventura said market condition may improve in a month's time so that the government can do the offering sooner than expected.

Pardo added the government is expecting some inflows coming from the International Monetary Fund, the Japan Bank for International Cooperation, the Asian Development Bank and the World Bank in the next couple of months amounting to about $950 million.

Pardo could not give an immediate breakdown of the inflow but said it will include the remaining $660 million from the IMF which will be released in two tranches -- one in June and the other one in September-- a co-financing for the IMF from the JBC, the release of the second tranche amounting to $100 million from the World Bank.

The decision to postpone the Eurobond offering was supported by the government's bookrunners ABN AMRO, Credit Suissee First Boston and JP Morgan.

BSP sources said the government decided to wait until the recent volatility in the bond and equity market subsides.

Earlier, the government successfully borrowed $800 million through a Global bond offering.

The government had wanted to go back immediately to the market with the Eurobond, but recent events and the fall of international stock markets have forced the postponement of the government's earlier plan to borrow another $700 million.