P12-billion bond offering from Pag-IBIG funds
Posted on February 23rd, 2010
The Home Development Mutual Fund (HDMF), more popularly recognized as he Pag-IBIG Fund launched a bond offering which will be auctioned to the public on March 9. The state-administered fund manager will be offering P12 billion bonds starting next month.
Jaime Fabiaña, chief executive officer of HDMF said that the proceeds of the funds would be used by the agency in refinancing a P7 billion debt maturing in May. The rest of the proceeds would be used to augment the agency’s funds.
The bond offerings were launched in an investors’ briefing held recently, where Fabiaña said the bonds would be definitely be attractive to investors. “They are tax free and enjoy the full and unconditional guarantee of the government through the Home Guaranty Corp.,” he said.
The term of the bonds would be five years and one day. They can also 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 target investors for the bonds are property developers, insurance firms and banks. The Development Bank of the Philippines (DBP) and First Metro Investment Corp. (FMIC), which is the investment arm of Metrobank Group, were tapped by HDMF as arrangers for the deal. The Land Bank of the Philippines would join the group as joint lead underwriters, while the Bureau of the Treasury serves as facility agent and registrar.
Pag-IBIG is a popular government agency whose main thrust is to provide affordable home financing to its members. Aside from housing loans, it also provides personal and other emergency loans. For 2009, the fund manager released a total of P46 billion loans to over 74,000 members nationwide, making it the biggest home financier in the Philippines.
