Deutsche Bank, others set $5-B DLPNs

The Philippine government launched recently its first tranche issuance of P5-billion US Dollar-Linked Peso Notes (DLPNs). The joint financial advisors and lead managers on the transaction are Deutsche Bank AG, Multinational Investment Bancorporation and Rizal Commercial Banking Corp.

The DLPNs are peso-denominated but linked to the movements in the dollar-peso exchange rate. They will have maturities of two and three years, with semi-annual interest payments and principal repayments to be made in pesos.

However, the interest and redemption amounts may change subject to the dollar-peso exchange rate at the time of payment. Given this unique feature, investors will be able to participate in the movements of the USD-PHP exchange rates upon investing in this instrument.

The Bureau of Treasury aims to raise a minimum of P5 billion for the primary issuance of first tranche of the DLPNs. The two and three-year notes are scheduled to be issued on Nov. 20, 2001 and Nov. 21, 2001, respectively.

The issuance of the DLPNs is part of the financing program of the Philippine government which seeks to introduce an innovative instrument that will broaden the range of investment avenues available to a wider investor base. The issuance is expected to reduce onshore demand for US dollars from investors intending to ‘dollarise’ their assets and encourage increased inward remittances and conversion to Philippine Pesos from non-resident citizens and other investors.

"We trust that this program will be a creative solution, an answer to the needs of both the issuer and the investors, leading to a wider array of financing instruments," Enrico Cruz head of Global Market for Deutsche Bank AG in the Philippines, said.

"The DLPN is a landmark Philippine sovereign issue that broadens the spectrum of securities available in the domestic capital market. The issue is an innovative instrument that allows investors to diversify and hedge their investment portfolios," said Cesar Crisol, president of Multinational Investment Bancorporation.

"A timely and responsive financial instrument that addresses the needs of the National Government, multinational companies, as well as other investors, reflecting the progressive mode of both the financial community and the regulatory agencies under the present administration," said Jaime Panganiban, RCBC executive vice president-treasurer.

With assets of more than one trillion and 98,000 employees, Deutsche Bank offers financial services throughout the world in over 70 countries. It ranks among the leaders in asset management, capital markets, corporate finance, custody, cash management and private banking.

Deutsche Bank is organized in two customer-oriented groups: "Corporate and Investment Bank" (CIB) and "Private Clients and Asset Management" (PCAM). The keys to the bank’s success remain constant: customer focus, the spirit of innovation, a broad range of product skills combined with technological power and financial strength delivered by highly skilled professionals.

In the Asia Pacific, Deutsche Bank employes more than 7,200 staff with offices in 15 countries. Through its branch in Manila, Deutsche Bank offers its clients a range of corporate, investment and private banking products and services.

Multinational Investment Bancorporation is the oldest existing independent full service investment house in the Philippines. It is one of the earliest and most active dealers in government securities. Since its inception in 1972, it has been in the forefront of developments in the Philippine capital markets. Its securities underwriting activities have involved both debt and equity issues and included various privatization programs of the government. MULTINATIONAL’s advisory services have extended to corporate mergers, acquisitions and reorganizations. Its services have also been made available to local government units both for project and municipal bond flotation.

Rizal Commercial Banking Corp. is the Philippine’s fifth largest private domestic commercial bank with total consolidated assets of about P157-billion as of end-June 2001.