By Iris C. Gonzales (The Philippine Star) Updated January 08, 2010 12:00 AM
MANILA, Philippines - State-administered Home Development Mutual Fund (HDMF), also known as Pag-IBIG Fund, is likely to proceed with its plan to issue P9 to P12 billion in bonds next month after failing to push through with it last year, market sources said yesterday.
“It looks like they don’t have enough time this month so it may happen in February,” said a source.
The source said Pag-IBIG definitely wants to proceed with the issuance in the first quarter of the year to take advantage of the cash-rich domestic financial system.
The same source said Pag-IBIG is still open to doing the bond sale via the usual route which is through the Bureau of the Treasury (BTr).
Another option is for Pag-IBIG to sell the bonds through a private placement similar to the way corporate bond issuers do it.
Pag-IBIG just needs to make a formal announcement for the issue and its joint book managers will just get the orders.
The state agency is looking at selling P9 to P12 billion in bonds, proceeds of which would be used to pay off maturing obligations.
Sources said Pag-IBIG has also decided to sell the bonds via a single transaction instead of through multiple tranches.
Pag-IBIG offers retail loans amounting to an average of roughly P500,000, mostly those within the C-income bracket.
Officials said the proposed bonds will have a tenor of five or seven years.
Members and nonmembers of Pag-IBIG, foreign investors, corporations, developers and insurance companies may invest in the proposed bonds.
Strong liquidity in the financial system has enabled a lot of corporate borrowers such as Globe and SM Investments Corp. to raise bonds last year.
Even the government sold retail treasury bonds in September 2009.
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.
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