Offering Circular 2006
I started reading the Offering Circular. I noticed one mistake for the 5 pages I checked out on the description on the Distribution Sector, which says 142 distribution utilities consisting of 119 electric cooperatives, 17 private utilities and 5 municipal utilities that actually totals 146.
The boss told me that we are going to hold a meeting with Didith next week to discuss the peso borrowings. I should be reminded to prepare the proposals and the calendar.
NPC lights up the market
Napocor prints lowest ever Philippines dollar coupon
News article on the bond issue
US$500 Million Notes due 2016; Statistics
For this year, my job in PSALM only requires me to work non-stop for two weeks.Most of it, however, were spent coordinating information from NPC people to the transaction counsel.
The deal was quick because we were just lucky. There was so much liquidity in the market. It does not require so much brouhaha. It was just tiring because I was surrounded with drama queens. So much of the crap talk, here are the stats.
Terms Issuer : National Power Corporation
Guarantor : Republic of Philippines
Issue Ratings : BB-/BB
Guarantor Ratings : B1/BB-/BB
Size : $500mm Reg S/ 144a
Yield : 6.875% s/a 30/360
Maturity : 02NOV2016
S/D : 02NOV2006
Spreads : UST+ 207, L+202, 27.5 over implied ROP curve (+30.5 over the OCT16, and 40.5 JAN16)
Price : Par
Books : Citi / DB
Denoms : 100k, 1k
Listing : Singapore
Headlines Lowest coupon ever
Tightest spread to sovereign since crisis
Largest book ever for Natpow deal
Fastest deal ever for Natpow (14 hour execution)
Book colour Books over 10X oversubscribed
210 investors
15 orders of over 100mm
Over 100 investor new to the NPC
Geographic Split USA 31%
Sing 20%
Phils 14%
Cont 14%
UK 12%
HK 8%
Other Asia 2%
Investor Type Funds 49%
Banks 24%
Ins/pension/cb 21%
Retail 6%
Pre-requisites before Pricing
1. IAC Clearance
2. Monetary Board Approval in Principle
3. Willingness to Guarantee by DOF
4. NP/PSALM Board Approval
5. First Comfort Letter
Don't forget to check conditions of MB Approval in Principle before asking for Final Approval.
Financing 2006
Day 1 Friday 13 October 2006 - Prior to this, sabi ng Presidente eh bilisan natin. Position ng bosing ko, hindi kaya. Hush hush kaya mai-commit ang international lawyer. Kaya naman nung araw ng nag-mandate, sabi ng abogado, hindi ko kaya ng isang linggo pero mapilit ang DOF. Ako naman eh nanahimik lang. First time eh, sabi nga ng President eh may birth pains.
Pero nag-commit ang bosing ko na kayang magreview ng proposals in 4 hours. Tama naman yung array namin. In terms of all-in cost, mababa naman talaga yung number 1 and number 2. Tama din yung evaluation ni Didith pero obvious na yung ibang parameters eh dun sa araw din lang naisip.
Ano ang di effective:
(1) Dapat kilala ka ng bangko
(2) Dapat daw yung execution time eh maikli.
Day 2 Saturday - Maaga yata ako sa NPC kasi they scheduled a due diligence that day. Kaya lang, di pa handa yung bangko. Wala pang joint proposal.
Day 3 Sunday - Due Diligence of NPC. Okay, full force. Wala pa rin joint proposal.
Day 4 Monday - Di ko na maalala kung ano ang nangyari this day. Pero alam ko, wala pa ring joint proposal,
Day 5 Tuesday - Lumabas ang first draft ng OC. Conference call with NPC. Dumating ang joint proposal with higher rates than selected proposals for shorter execution time. Didith cancelled the call for banks to review their joint proposal. Finance due diligence call. Requested NPC Legal to prepare clearance draft, which will be on hold pending nego of PSALM Legal with the banks. Mali nga lang title, nakalagay eh 750.
Day 6 Wednesday - Update call. Okay na yung joint proposal. Pero dahil late na sila nagbigay ng joint proposal, hindi na rin natuloy yung launch na gustong mangyari ni Didth. Hindi pa rin okay ang docs. Hindi pa tapos ang OC.
Day 7 Thursday - Wala pa ring nangyayari.
Day 8 Friday - Malaking issue yung certification from COA na di ko alam eh hinihingi pala. In the past eh non-issue ito. Si Joslyn ang salarin dito. Review of F pages.
Day 9 Saturday - Draft 4 ng OC.
Day 10 Sunday - Update call on the legal docs.
Export Credit Agencies
Cafe Al Fresco, Hyatt Hotel, Roxas Boulevard - There are 29 ECAs in the world. These ECAs are governed by the OECD rule, which only allows funding of 85% of a project's foreign component and 15% of the local counterpart.
I also attended a presentation to investors by the Home Guaranty Corporaion, whose president is an ETC alumnus -- Mr. Bong Bongolan. He was not arrogant as I found him in the SAMASA conference but as naughty. He can't be arrogant because he needs the investors to buy his zero coupon bond issue. I determined, however, that whoever sat in their loan negotiations, was unaware that pari passu ranking of their domestic indebtedness should be limited to obligations similar in nature.
It is also the second time that I rode home with the President. I did not notice that the letter circulated in the e-mail was unsigned. I thought it had her blessings but it turned out that it was an independent action by the Corporate Communications Group. Nonetheless, I told her that the upside of the e-mail are shedding more light in the issue with PEMC and helping the PSALM employees defent the position of the Corporation in confronting accusations of price manipulation.
Busy day today. Circulate computation tables to evaluation team. Finalize results, hopefully, by lunch time. Four proposals per member. Use Bloomberg Swap Manager (SWPM) to determine fixed-rate equivalent of floating rate note proposals. Aja! Aja1
