2004 - Asianbanks.net

IBODI consists of the following:GroupParent Company2004 2003 2004 2003(In Thousands)Government bondsP=30,994,603 P=31,944,573P=30,694,106 P=30,665,988BSP treasury bills 12,213,130 9,437,973 12,021,968 9,422,657Private bonds 5,012,4944,859,933 4,717,6024,587,692Treasury notes 1,375,181 696,448 1,130,283 696,448Others 2,480,477 250,782 1,840,551 195,29152,075,885 47,189,709 50,404,510 45,568,076Less allowance for probable losses(Note 10) 17,696 154,286 15,645 124,645P=52,058,189 P=47,035,423 P=50,388,865 P=45,443,431IBODI includes US dollar-denominated bonds amounting to US$630 million (P=35.5 billion) and US$590 million (P=33.2 billion) as of December 31, 2004 and 2003, respectively.As of December 31, 2004 and 2003, the market values of the IBODI are as follows:GroupParent Company2004 2003 2004 2003(In Thousands)Government bonds P=27,383,703 P=27,912,012 P=27,083,206 P=26,658,057BSP treasury bills 12,129,635 9,383,742 11,938,472 9,383,742Private bonds4,300,4634,192,9944,005,5713,920,753Treasury notes 1,353,814 698,296 1,108,916 698,296Others 1,013,561 921,783 373,637 866,293P=46,181,176 P=43,108,827 P=44,509,802 P=41,527,141Peso-denominated IBODI bear nominal annual interest rates ranging from 4.0% to 11.0% in 2004 and from 4.0% to14.0%, in 2003; for foreign currency-denominated IBODI, annual interest rate range from 1.5% to 14.0% in 2004 andfrom 1.5% to 12.3% in 2003.As of December 31, 2004, the subordinated notes (included under Private bonds) represent investments in GlobalIspat Holdings, Inc. (GIHI) and Global Steelworks International, Inc. (GSII) which assumed the liabilities of NationalSteel Corporation (NSC).On October 15, 2004, GIHI and GSII (SPV companies), and the NSC Creditors entered into an agreement whichsets forth the terms and conditions upon which the NSC Creditors have agreed to accept zero interest coupon notesin the aggregate amount of P=12.3 billion to be issued by SPV companies in settlement of the liabilities of NSC.The zero-interest coupon notes were issued in two tranches, namely, (a) Tranche A Note in the principal amount ofP=2.0 billion and (b) Tranche B Note in the principal amount of P=10.3 billion, which notes are secured by a firstranking mortgage and security interest over the NSC plant assets and stand-by letters of credit by the SPVcompanies in accordance with the schedule in the agreement.On October 15, 2004, the Parent Company received Tranche A Note at principal amount ofP=78.3 million and Tranche B Note at principal amount of P=328.2 million in exchange of the outstanding receivablefrom NSC of P=549.5 million. The Parent Company carried the subordinated notes at discounted values using adiscount rate of 13.2%.- 54-