Pinoy Entrepreneurs

Heavily-indebted state grains agency National Food Authority (NFA) raised P9 billion through the sale of 10-year Treasury bonds (T-bond) in an auction yesterday and will use a tap facility to secure another P1.5 billion more from the same debt paper.

“We will request for the opening of the tap window for another P1.5 billion,” NFA assistant administrator for finance and administration Celia Tan said.

Banks’ offers for the float totalled P10.43 billion with the awarded debt papers bearing a coupon rate of 6.375 percent.

The NFA will seek a total of P27 billion this year to cover losses mostly from subsidy schemes on rice prices that could reach P30 billion.

The NFA said it would need P16.5 billion more outside the float that could be raised through the sale of more debt papers or through direct loans.

Average rate of the debt paper stood at 5.96 percent, lower than the 5.42 percent of the benchmark five-year PDST-F, which is defined by the Philippine Dealing and Exchange Corp. (PDEX) as the “average of the best 60 percent of firm bid rates posted by market-making banks for 12 tenors at 11:16 a.m. daily.”

Tan told reporters after the auction that proceeds of the bond sale will be used for their operational requirement as well as prepayment of loans.

She said the pricing was “very good” and the appetite was high after total bids reached P10.4 billion against their initial target of P5 billion.

The NFA hopes to raise another P1.5 billion from the tap window either tomorrow or Thursday for government securities eligible dealers (GSEDs).

“We will refresh the opening of the tap window for us to get another P1.5 billion,” she said.

Tan said they have other options like bilateral loans to get funds but they prefer selling debt paper.

“The rate is good (so we want to maximize this),” she said.

Source: TheDailyTribune
Photo Credit: John Javellana