RP sets roadshow for $700-M loan

The National Government is gearing up for an international roadshow next month, possibly in the US, European Community and Japan to drum up interest for a programmed $500-million to $700-million loan to help plug this year’s budgetary shortfall.

Juanita Amatong, officer in charge of the Department of Finance (DOF), said government is not pushing through with its earlier plan to tap the international debt market through a private placement for a $200-million loan.

"I don’t think we are ready this month for a private placement because the rates are still high. This might be postponed," Amatong said.

It was earlier reported that investment bank Chase Manhattan was given the mandate to underwrite the deal but incoming Executive Secretary Alberto Romulo said the government is still studying the proposals of JP Morgan Chase, SBC Warburg and Lehman Brothers.

Instead, the government will push for a "deal roadshow" next month, and will incorporate the $200-million loan with the bigger planned borrowing of $500 million.

"This should cover most of our financing requirements for the year. Earlier, we were thinking of a no-deal roadshow, meaning we will just be informing the market that the country is back in business, but this time, it will be a deal roadshow with the intent of acquiring new loans," Amatong said.

Amatong added government is finalizing the details for the roadshow but has initially determined a series of visits to the US, Japan and Europe.

At the same time, Amatong said government is still evaluating proposals by several investment banks to underwrite the borrowing.

Amatong added government is still studying which option, the US, Samurai or Euro bonds will be cheapest for the government.

Earlier, National Treasurer Sergio Edaza said government was looking at five to 10-year bond issues that would offer the most favorable spreads.

Government has programmed commercial borrowings this year to total P182 billion.

The planned borrowing will be used to help fund an expected P145-billion budget deficit this year. As of last month, the budget gap totaled P36.72 billion or P1.6 billion lower than the P38.27 billion target for the period.