HOME Guaranty Corp. (HGC), the Philippine state-owned mortgage insurer, sold P6 billion ($121 million) of seven-year zero-coupon bonds at an auction in Manila.
The bonds, guaranteed by the government and exempt from some taxes, were sold at a yield of 6.375 percent. That compares with 7.1883 percent for seven-year Treasury bonds in trading among banks Wednesday, according to the Money Market Association.
Zero-coupon bonds are sold at a discount to face value, which is paid on maturity. Buyers will pay 64.999 percent of face value. Home Guaranty will raise a net P3.87 billion,
President Gonzalo Bongolan said the company will sell another P6 billion of the bonds by “early next year,” he said.
Wednesday’s sale follows the company’s rejection of all bids at an October auction for P12 billion of debt. Investors demanded excessive yields, Bongolan said at the time. That sale was planned in part to pay P7 billion of debt maturing as early as next year.
Banks and other investors submitted bids to buy P11.99 billion of the bonds. (Bloomberg)
Business Mirror
November 23, 2006
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