NG unloads $100-M Napocor bonds

The National Government unloaded last week some $100-million worth of bonds issued by the National Power Corp. (Napocor) to finance its year-end requirements.

The government is holding an undisclosed amount of Napocor bonds. Finance Secretary Juanita Amatong told reporters that about $100 million worth of bonds have been sold last week "for more than the face value" of the papers.

Amatong said the sale was done through a private placement although she declined to disclose who bought the bonds from the government.

"These bonds were booked as asset so it was just a simple asset-sale," she pointed out. "We wanted liquidity so we decided to sell rather than borrow."

Amatong said there were no immediate plans to sell more Napocor bonds but she said the government’s stance was purely opportunistic, dependent on openings in the market that the government could take advantage of.

"In this case, we were able to sell the bonds above par so that was good for us," she said.

Government has already concluded the bulk of its borrowing for the year as well as some pre-funding for 2004 as the Bangko Sentral ng Pilipinas (BSP) gave the authority for a total of $1-billion borrowing before the May elections next year.

The Arroyo administration decided to undertake a final $1-billion fund-raising from the international credit market to front-load its 2004 external borrowing, hoping to avoid the crunch that is expected to build up towards the May elections next year.

The government just concluded a successful $1.5-billion global bond offer in October but officials said they were still looking for opportunities to borrow ahead of the elections, probably before the end of the year.

National Treasurer Eduardo Sergio Edeza earlier said the government is eyeing another $1-billion borrowing although it has not been decided whether it would be in the form of a straight loan or the issuance of more global bonds.

"Definitely we don’t want to go to the market right before the elections," Edeza said. "We have to see if we can get good terms and if there is still an appetite in the market for us."

The success of the Philippine government’s recent bond float, according to Edeza, was the result of the pent-up demand for Philippine instrumentalities. "We had announced early on that we planned to issue bonds but we didn’t do it right away so there was a build-up in demand," he said. "That’s why there was such a strong response to our last offer."

However, Edeza said there was no pressure to borrow especially after the success of the government’s bond offer. "We just want to know if it is possible to front-load our borrowing ahead of the elections," he said.

The government’s borrowing requirement for 2004 is estimated at $1.8 billion which would help finance about $7-billion worth of various obligations of the government and government-owned corporations that were scheduled to mature within the next 16 months.

A senior Monetary Board official revealed that the amount of maturing obligations for the remainder of the year was "slightly over $5 billion", including the maturing obligations of the National Power Corporation (NPC).