3 more investment banks offer to underwrite $200-M loan

Three more international investment banks are offering to raise up to $200 million in new loans for the National Government, according to outgoing Finance Secretary Alberto Romulo.

Romulo said that aside from Chase Manhattan Bank, investment banks JP Morgan, Lehman Brothers and SBC Warburg are also proposing to act as bookrunners for the contract.

These three investment banks have been wooing the Arroyo administration to tap them as underwriters for the government’s programmed borrowings for the year.

Despite an earlier letter by Romulo to Chase Manhattan president Roberto Panlilio saying the bank has been mandated to underwrite the deal, Romulo said the deal has not yet been firmed up.

"As far as the borrowing is concerned, we will still push through with it, but the government is still assessing the proposals coming from other interested parties, not just Chase Manhattan," Romulo said.

Another official Department of Finance official said, however, that the contract with Chase Manhattan is a done deal and unless new developments take place, the contract signing has been set for next week.

The proceeds from the $200-million loan will be used to plug this year’s widening budget deficit which for the first four months already reached P36.717 billion.

While the DOF did not specify what loan instrument will be used, the loan is scheduled to be repaid by 2003.

The planned $200-million loan forms part of the $400 million borrowing of government from commercial banks. – Rocel Felix