The National Development Company (NDC), the investment arm of the Department of Trade and Industry (DTI), is set to offer NDC Agri-Agra Bonds (AA Bonds) that would raise P3.5 Billion to support the irrigation projects of the National Irrigation Administration (NIA). The P3.5 B AA Bonds will start on Wednesday, November 25.

NDC said the bond proceeds will be used to fund the NIA repair and rehabilitation of irrigation facilities, which would restore some 33,000 hectares of rice lands and to repair and upgrade functional irrigation systems servicing another 20,000 hectares.

The funding will also restore and rehabilitate additional irrigation facilities nationwide covering 21,600 hectares and 50,000 hectares respectively.
The AA Bonds are obligations of the NDC with a direct and unconditional guarantee by the national government. It will have five year maturity period from the date of issue.

Interest payments shall be made semi-annually and on the part of the investors, interest income from the bonds shall be tax exempt.

Further, the AA Bonds are eligible as liquidity for government deposits and as security for the faithful performance of trust duties.

The planned bond float constitutes the fourth (4th) tranche of NDC AA bonds, which are being issued in accordance with Executive Order 83 issued on December 25, 1998 and Executive Order No. 530 issued in May 2006.

The bond issuance is an alternative compliance to PD 717 (Agri-Agra) which institutional bondholders can subscribe as the 2nd tranche of AA Bonds issued in 2002 is set to be retired in December 2009.