Wednesday, January 10, 2007 Pag-ibig Fund to float P2B in bonds to provide more loans to members
THE Home Development Mutual Fund (HDMF), also known as Pag-ibig Fund, will once again float to the market P2 billion worth of housing bonds this month under its Pag-ibig Housing Bonds 2007 series.
This time, though, the Fund will give more priority to retail investors, said Pag-ibig Fund marketing assistant Ariel Acosta.
“This is our way of helping them alleviate their lifestyle and encourage them to save for long-term investments,” he said.
Pag-ibig said potential investors include Pag-ibig members and non-members, foreign nationals, corporations, developers and insurance companies.
Shareholders will be paid a fixed interest rate, which is tax-free, on a semi-annual basis.
In an interview last Monday, Acosta said the bond’s interest rate is yet to be determined as Pag-ibig is still waiting for the Bangko Sentral ng Pilipinas’ approval of the offering.
He said he expects the tax-free rate to be at least five percent.
He said the bond float, a program launched by Pag-ibig in 2001, is meant to increase the agency’s funding capacity while financing more housing loans for its members.
According to a statement from Pag-ibig, the bonds, which will mature after five years and one day, include denominations of P10,000 to P10 million.
As proof of ownership, bond investors will be issued Pag-ibig housing bond certificates by the Development Bank of the Philippines (DBP) Trust Services.
Investors are required to open and maintain a deposit account either with DBP or Land Bank of the Philippines (LBP) to facilitate crediting of the interests and the principal amount upon maturity of the bonds.
With LBP and DBP as Pag-ibig’s “underwriters,” Acosta said marketing the bonds will be easier.
He said he expects the bonds to be sold out two weeks after its release in the market since as early as now Pag-ibig has been getting inquiries.
After the public offering dates, which Pag-ibig will announce this week, investors can buy the bonds at the secondary market through DBP or LBP at prevailing market rates.
Even as the bonds mature, shareholders can sell the bonds to other interested investors through DBP and LBP, Acosta said.
To ensure security of the bonds, Pag-ibig will maintain a debt repayment fund equal to P2 billion with DBP Trust Services.
“It means that should Pag-ibig experience bankruptcy we are able to repay our investors 100 percent of the amount they invested,” Acosta said. (MMM)
