Trade and Industry Secretary Manuel Roxas II said yesterday that there was a strong interest in the flotation resulting in oversubscription.
Total tenders for the NDC bonds amounted to P12 billion, six times as much as the total offering of only P2 billion.
The NDC bonds have a seven-year maturity and carry a coupon rate of 6.875 percent. The bonds are tax exempt and are backed by a National Government guaranty.
They are negotiable and transferable and can be used as liquidity reserves for deposits, deposit substitutes, common trust funds and trust and other fiduciary accounts.
They can also be used as liquidity floor for government deposits and as security for the faithful performance of trust duties.
Investing in the bonds will also be considered as alternative compliance to the Agri-Agra requirement.
About half or P1 billion of the proceeds of the bonds will be used to finance Agri-Agra related small and medium-sized projects.
The other P1 billion will be used for the Department of Agrarian Reform’s (DAR) Land Acquisition Program.
The current float is the second bond issue of the NDC. A third tranche is being eyed for offering in the first quarter next year.
Government sources said the proceeds of the third bond flotation will be earmarked for housing projects and for lending to small and medium-scale enterprises. – Marianne Go