The Bangko Sentral ng Pilipinas’ (BSP) foreign exchange or FX swap transactions have reached $ 9.2 billion as of November. FX swaps consists of two currency purchase-sale transactions — spot foreign currency exchange whereby parties make immediate settlements, and forwards — which is an agreement between two parties to purchase or sell currency in future for a certain agreed price. Transacting long positions in forwards in foreign currencies help stem the rapid rise in gross international reserves (GIR), which as of October totaled $ 32.4 billion. In October the central bank bought over $ 3 billion of dollars from the spot market to beef up GIR and to slow down the peso appreciation. But they continue to incur losses from its FX transactions. Last year BSP FX swaps and forwards amounted only to $ 6 billion and $ 2 billion three years ago. Presently, the BSP can transact FX swaps of up to 50 percent of the country’s GIR, or about $ 15 billion. By BSP definition, GIR are foreign assets that are readily available to and controlled by the central bank for direct financing of payments imbalances. GIR consists of gold holdings, special drawing rights, foreign investments and foreign exchange. These assets are valued mark-to-market.

Benpres Holdings Corporation and Lopez Inc. have jointly purchased $ 43-million worth of debt held by Asian Infrastructure Fund, of which they are co-obligors. In a disclosure to the Philippine Stock Exchange (PSE) yesterday, Benpres president Angel Ong said the debt has been purchased for $ 32.3 million, with Benpres paying $ 25.8 million and Lopez Inc. paying $ 6.4 million. Ong said the debt constitutes 10 percent of the total outstanding principal amount of debt of Benpres. Benpres also purchased debt from five long term commercial paper (LTCP) holders amounting to P9.5 million. The debt was acquired for P5.8 billion or at 60 percent of the principal amount of debt. "Benpres continues to pursue discussions with various creditors with a view to retiring their debt or entering into restructured financing agreements," said Ong. Based on the firm’s 2006 annual report, Benpres debt under restructuring as of December 31, 2006 amounted to $ 400 million consisting of direct obligations and contingent obligations. Direct obligations are broken down into LTCPs amounting to P2 billion and Eurobond 7.875 percent notes worth $ 150 million. Contingent liabilities consist of $ 210 million debt of Bayan Telecommunications. (JAL)

China Banking Corporation (China Bank) and a consortium of local banks signed a Notes Facility Agreement with Quezon Power (Philippines), Limited Company to participate in the US$ 100-million seven-year Fixed Rate Note Facility arranged and underwritten by BDO Capital & Investment Corporation. China Bank extended $ 20 million to support Quezon Power’s various operational and recapitalization requirements. China Bank, Bank of the Philippine Islands (BPI), and Rizal Commercial Banking Corporation (RCBC), co-underwrote the issue. Banco de Oro (BDO) Trust Banking Group acted as Facility Agent. Quezon Power owns and operates a 460-MW power generating facility in Mauban, Quezon and manages and maintains a 31-kilometer transmission line from Mauban to the Tayabas substation. It also offers one of the cheapest sources of power for Meralco in the Luzon grid.

The consortium of Republic Cement Corporation and Lafarge Holdings (Philippines) Inc. has won the bid to acquire Concrete Aggregates Corporation’s assets and the operation of CAC’s basalt quarry in Angono, Rizal for P670 million. In a disclosure to the Philippine Stock Exchange (PSE) yesterday, RCM said the consortium’s acquisition of the aggregates business will be through the purchase of all the shares of a new corporation (Newco) to be formed by CAC for the purpose. It noted though that the acquisition is still subject to the fulfilment of certain conditions including the Department of Environment and Natural Resources’s approval of the proposed 15-year quarry operating agreement between CAC and Newco. The winning bid of P670 million will be paid by the consortium of RCC and LHPI to CAC upon closing of the transaction. Newco will pay CAC royalty fees during the term of the operating agreement.