National Government nixes offers of 3 foreign bank

The National Government thumbed down offers by three foreign banks to underwrite loans totaling $400 million after forging a $400-million bond for soon-to-be-privatized National Power Corp. (Napocor).

National Treasurer Sergio Edeza said government rejected separate proposals by the Hongkong Shanghai Banking Corp., Deutsche Bank and Banque Nationale de Paris to handle the issuance of loans for the government.

HSBC offered to underwrite a $200-million loan, while Deutsche Bank and Banque Nationale de Paris offered to separately handle loans of $100 million each.

Edeza said that instead of the $400-million loans, the National Government is considering issuing $400 million in long-term bonds for Napocor which will mature in 10 years. The $400-million bond offering for Napocor will be separate from the earlier plan to float $500-million bonds which will be undertaken by Credit Suisse First Boston.

Previously, Finance Secretary Jose Isidro Camacho said the government is just awaiting the approval of the US Securities and Exchange Commission before it proceeds with the bond floatation.

Camacho said the bond float which government wants done this September, could be a private placement or a public issue.

Earlier, government was inclined to accept HSBC’s offer for a $200-million private placement, the proceeds of which will go to paying part of Napocor’s maturing obligations as well as fund its operations.

Banque Nationale de Paris’ offer was to re-open sovereign bonds by issuing a 100-million, five-year debt instrument.

Camacho said government is still studying whether it still has to acquire additional loans, most of which will go into helping plug its budgetary shortfall of P145 billion this year. So far, government has already covered this year’s financing requirements.

"We are pretty-much covered this year. After we’re done with the $500-million bond offering, the budget deficit will be fully financed," Camacho said. – Rocel Felix