NFA issuing P10B in notes to pay debt, finance capex

The National Food Authority will be floating P10 billion in bonds on Tuesday to raise funds to pay off maturing debt, and bankroll capital expenditures. Finance Undersecretary and acting National Treasurer Roberto Tan told reporters that NFA's offer is composed on P8 billion in notes with a green shoe option of up to P2 billion that allows underwriters to buy and resell additional shares to cover heavy demand. The debt instruments due 2018 have a one-time call option that could be exercised by 2013. “The proceeds of the notes will be used by the issuer to finance procurement of grains, capital expenditures and general funding requirements and to refinance its maturing debt obligations," Tan said. NFA has tapped AB Capital and Investment Corp., Deutsche Bank AG, Multinational Investment Bancorporation, Philippine Commercial Capital Inc., SB Capital Investment Corp., and United Coconut Planters Bank as joint issue managers. NFA posted a net loss of P4.5 billion in 2007, as it sold rice at lower than market prices so the basic commodity would be affordable to the poor. The Department of Finance is now looking at ways to restructure the operations of NFA which is the biggest losing government-owned and controlled corporation. - GMANews.TV