Pag-IBIG Fund launches P12-billion bond offering

MANILA, Philippines - State-administered Home Development Mutual Fund (HDMF), also known as Pag-IBIG Fund, launched yesterday a P12-billion bond offering, to be auctioned to the public on March 9.

HDMF chief executive officer Jaime Fabiaña said proceeds of the bonds would be used to refinance P7 billion in debt maturing in May while the rest would be used to augment the agency’s funds.

In an investors’ briefing yesterday, Fabiaña said the bonds have enough sweeteners, making it an attractive investment.

“They are tax free and enjoy the full and unconditional guarantee of the government through the Home Guaranty Corp.,” he said.

The bonds, which would mature in five years and one day, can serve as alternative compliance by banks with the Agri-Agra Law and qualify as reserve assets of insurance companies and can count as compliance with the Urban Housing Development Act.

The HDMF chief said target investors are banks, property developers and insurance firms.

The launch follows the approval of the issue by the Bangko Sentral ng Pilipinas (BSP) last week.

Pag-IBIG has tapped state-owned Development Bank of the Philippines and First Metro Investment Corp., the investment-banking arm of the Metrobank Group as arrangers for the deal.

The Land Bank of the Philppines joins the DBP and the FMIC as joint lead underwriters while the Bureau of the Treasury serves as facility agent and registrar.

Pag-IBIG is the agency that provides affordable home financing to members. It also provides personal and other emergency loans.

Last year, the fund released P46 billion in end-user financing to over 74,000 members nationwide, making the agency the biggest home financier in the country.