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STATE-controlled Development Bank of the Philippines (DBP)
is set to sell the second tranche of bonds issued by the
Philippine Ports Authority (PPA) anytime this week.
Worth P500 million, bond sale proceeds will be used to
pay for the upgrade of six terminals throughout the
country.
The bond
sale’s provisions will remain the same, Aida P. Dizon,
PPA assistant general manager told the BusinessMirror.
Investors buying the debt paper will get a 7-percent
interest once it falls due 7-years after issuance.
Last
July DBP and First Metro Investment Corp. (FMIC), which
agreed to underwrite half of the P2-billion, two-tranche
transaction, already sold P500 million worth of bonds
each as part of the first tranche.
However,
FMIC, an affiliate of Metrobank, the Philippines’
largest lender, has yet to decide when it will disburse
its share of the bond sale’s second tranche.
An FMIC
official familiar with the matter said that the company
may change the PPA’s risk profile, forcing the state-led
corporation to pay additional interest to investors.
According to the executive, the Batangas Port
expropriation case “has a big impact on the PPA,”
referring to a Supreme Court decision instructing the
agency to hike the compensation to landowners whose
properties were taken over by the government. Instead of
originally paying P500 per square meter, the court said
the agency should pay P5,000 for every square meter
expropriated for the Batangas port’s expansion. The
expansion covers nearly 1.3 million square meters.
“So, we
really have to change the risk profile,” the official
said last week.
Although
the official refused to give a definite date for the
bond sale, he explained that First Metro executives are
still keen on selling the PPA-issued bonds even after
its February deadline has expired.
If the
Supreme Court rules with finality, the PPA will have to
pay landowners an estimated P11 billion to P14 billion,
including interest and penalties. |
