NG’s $500-M global bond issue hangs

The National Government appears to be having second thoughts about pushing through with its plan to issue $500-million worth of global bonds, this month.

Finance Secretary Jose Isidro Camacho said a decision will be made this week on whether or not to go on with the global bond issue. The government is still awaiting the approval of the bond issue by the US Securities and Exchange Commission.

Proceeds from the bond offering were supposed to shore up the financing requirements of the state-run National Power Corp. (Napocor).

Napocor, however, mandated US-based Bear Stearns to arrange a placement of seven- year notes worth about $400 million. This is on top of a P3-billion worth of short-term bonds backed by the National Government which Napocor will issue today.

Since this takes care of most of Napocor’s financing requirements, Camacho said borrowings in excess of the power firm’s funding needs will likely be used for Napocor’s money requirements for 2002.

The government had said earlier it would push through with its planned $500-million global bond offering, the proceeds of which are also intended to help plug the gaping budget deficit which is projected to hit P145 billion this year.

But then the government, according to sources, has been having difficulty getting the approval of the US SEC because US monetary authorities are reportedly insisting that the Arroyo administration put in place first an anti-money laundering law to get it off the list of uncooperative countries listed by the Paris-based Financial Action Task Force. This was, however, denied by Camacho.

Earlier, government rejected offers by three foreign banks to underwrite loans totaling $400 million after forging a $400-million bond for the soon-to-be-privatized Napocor.

Government rejected separate proposals of the Hongkong Shanghai Banking Corp., Deutsche Bank and Banque Nationale de Paris to handle the issuance of loans for the government.

HSBC offered to underwrite a $200-million loan, while Deutsche Bank and Banque Nationale de Paris offered to separately handle loans of $100 million a piece.

Earlier, Edeza said that instead of the $400 million loan, the National Government is considering issuing $400 million in long-term bonds for Napocor which will mature in 10 years.

The $400-million bond offering for Napocor will be separate from the earlier plan to float $500 million bonds which will be undertaken by Credit Suisse First Boston.

Camacho said government is still studying whether it still has to acquire additional loans, most of which will go into helping plug its budgetary shortfall of P145 billion this year. So far, government has already covered this year’s financing requirements. – Rocel Felix