Citicorp to manage 1-yr discounted dollar T-bills

The government has appointed Citicorp Capital Philippines Inc. (CCPI) to underwrite and issue a one-year discounted US Dollar Treasury Bill which is expected to raise a minimum of $100 million. CCPI is a subsidiary of the Citibank group.

Department of Finance officials expect that it would be launched and issued next week. The benchmark for interest rates will be the one-year LIBOR (London Inter-bank Offered Rate).

This will be the first time the Philippine government is issuing a dollar-denominated government security offered to onshore investors dealing in foreign currency denominated units (FCDU).

But the net interest rate should not exceed 250 basis points (bps) from the one-year LIBOR.

National Treasurer Sergio Edeza said that they are also looking at issuing global bonds next year.

"We will look at the timing and if the rates are good," he said. "Our global bond is one option aside from another yen-denominated borrowing which received a guarantee commitment form the Japan Bank for International Cooperation (JBIC)."

Successful issues earlier this year were the $460-million Yen bond, the $250-million issue handled by the Credit Suisse First Boston, and the minimum $100-million overseas Filipino workers (OFW) bond issue. – Ted Torres