HGC plans to issue P5-B bonds next year

Home Guaranty Corp. (HGC) is planning to issue at least P5 billion worth of bonds next year as part of efforts to strengthen its operations, its top official said during the weekend.

HGC president Gonzalo Bongolona said the agency expects to work on the approval for the bonds by the latter part of this year.

HGC wants to issue interest-bearing 10-year bonds, Bongolan said. He expects strong investor appetite for the bonds, given the improving finances of the agency.

He said that the last time the agency offered bonds which was in 2007, there was strong market appetite. The agency expected to offer only P7 billion worth of bonds then but it was able to sell P8.2 billion, he noted.

Home Guaranty is a government-owned and controlled corporation mandated by law to extend guarantee cover to all bond issuances of other state-run firms.

The funds that would be raised would be used mainly for the refinancing needs of the agency, Bongolan said.

Bongolan is optimistic that the agency would continue to improve operations this year on the back of prudent strategies and continuous disposal of assets.

Through the years, the company has acquired various properties including residential villas at the Triboa Bay in Subic Freeport Zone in Olongapo City and 42 units in Forest Hills Village Resort, also in Subic.

Last year, HGC sold P1.17 billion in assets comprising of real estate and other properties acquired by the agency from borrowers who failed to pay their dues to banks.

Last year, the agency raised P414 million in guarantee fees, up from P374 million in 2006. HGC charges its clients a guarantee fee ranging from 0.5 to 1.5 percent of the guaranteed amount.

Total guarantees of HGC last year stood at P64 billion, higher than the P63 billion recorded in 2006.