DBP's $300-M global bond float for PPP fund gets OK

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has given state-owned Development Bank of the Philippines (DBP) the green light to issue up to $300 million worth of senior notes to raise much needed funds for its contribution to the P200 billion public private partnership (PPP) initiatives of the Aquino administration.

The BSP has approved in principle the proposed issuance of 10-year US-dollar senior notes by DBP as it intends to contribute 25 percent of the proposed PPP fund to finance land acquisition for right-of-way and other pre-development costs.

DBP has tapped HSBC, JP Morgan, Credit Suisse First Boston, and Goldman Sachs as bookrunners of the planned issuance of US-dollar senior notes.

The government financial institution decided to issue US dollar debt papers instead of global peso bonds wherein it mandated Goldman Sachs, HSBC, and JP Morgan late last year as bookrunners.

DBP together with government-run Land Bank of the Philippines as well as pension fund managers Government Service Insurance System (GSIS) and Social Security System (SSS) have earmarked about P200 billion to bankroll major infrastructure and development projects under the Aquino government’s PPP scheme.

DBP president and chief executive officer Francisco del Rosario announced last November that the GFIs and pension fund managers were contributing P200 billion to beef up the P12.5-billion budget allocated by Congress for PPP projects this year.

Del Rosario explained that the seed money will be made available while they are still mapping out the details of the Philippine Infrastructure Development Fund (PIDF).

The PIDF will help accelerate infrastructure development in the Philippines; promote Public Private Partnership in financing qualified infrastructure projects; and provide long-term fund sources in local currency to the project partners.

DBP recently exercised its call option on the P2.35-billion unsecured subordinated debt lower tier2 capital last Jan. 18.