Republic of the Philippines Launch Announcement

MANILA, Philippines, Nov. 8, 2012 /PRNewswire/ -- The Republic of the Philippines (the "Republic") announced today that it is inviting holders of the bonds specified below (the "Bonds") to submit offers (the "Offers") to sell the Bonds to the Republic for cash. The invitation to submit Offers to sell Bonds for cash described in this announcement is referred to as the "Invitation." The full terms and conditions of the Invitation are described in the Invitation for Offers dated November 8, 2012 (the "Invitation for Offers"). 
 

The Republic intends to pay the aggregate Purchase Price (as defined herein) of the Bonds purchased pursuant to the Invitation and accrued interest and expenses to be borne by the Republic in connection with the Invitation from (1) certain investible funds from the Bureau of the Treasury of the Republic (the "Bureau of the Treasury Funds") and (2) the proceeds of a contemplated offering and sale by the Republic of one or more series of new bonds (the "New Bond Offering"). If any 8.750% Bonds due 10/7/2016 are purchased pursuant to the Invitation, these purchases will be made using only the proceeds from the New Bond Offering.

The Invitation is subject to certain conditions, including (1) the availability of the Bureau of the Treasury Funds and (2) the successful offering and sale by the Republic of one or more series of new bonds in the New Bond Offering (which is conditioned on, among others, the receipt of certain approvals of the Monetary Board of the Bangko Sentral ng Pilipinas, the central bank of the Republic, related to the New Bond Offering), each on terms and conditions acceptable to the Republic and collectively providing sufficient funds to pay the aggregate Purchase Price of the Bonds accepted for purchase by the Republic pursuant to the Invitation and accrued interest and expenses to be borne by the Republic pursuant to the Invitation (the "Financing Condition"). The Republic expects to announce whether the Financing Condition has been satisfied no later than 10:00 a.m., New York City time, on November 16, 2012 (such date, the "Announcement Date"), or as soon as practicable thereafter. In addition, notwithstanding any other provisions of the Invitation, the Invitation is conditioned on the absence of legal actions or proceedings affecting the legality or the timing of or imposing restrictions on the consummation of the Invitation and certain other conditions described in the Invitation for Offers.

The Invitation expires at 5:00 p.m., New York City time, on November 15, 2012 (such date and time, as it may be extended, the "Expiration Deadline"), unless the Republic, in its sole discretion, extends it or terminates it earlier. The right to withdraw an Offer will expire at 5:00 p.m., New York City time, on November 15, 2012. The Republic may, but will not be required to, extend withdrawal rights if it extends the Expiration Deadline.

No later than 10:00 a.m., New York City time, on the Announcement Date, or as soon as practicable thereafter, the Republic will announce whether the Financing Condition has been satisfied, the approximate principal amount (if any) of each series of Bonds expected to be purchased and the expected proration factors. The Reference Yield (as defined below) and the Purchase Price for each series of Bonds accepted for purchase will be determined at or around 11:00 a.m., New York City time, on the Announcement Date (such date and time, the "Price Determination Time"). As soon as practicable after the Price Determination Time, the Republic will announce, for each series of Bonds accepted for purchase, the principal amount accepted for purchase, the Reference Yield, the Purchase Price and any applicable proration factor. If the Invitation is consummated, the date on which the Republic pays for the Bonds being purchased pursuant to the Invitation (the "Settlement Date") is expected to be November 27, 2012, or as soon as practicable thereafter, subject to any extension of the Expiration Deadline.

If you hold Bonds and submit a valid Offer for those Bonds pursuant to the Invitation, and the Republic accepts your Offer, the Republic will, subject to proration and the conditions described in the Invitation for Offers, pay you, for each US$1,000 or €1,000, as the case may be, principal amount of each series of Bonds purchased from you:

• an amount in cash in U.S. dollars or euros, as the case may be, (rounded to the nearest cent, with $0.005 or €0.005 being rounded up to a full cent) equal to the product of (x) US$1,000 or €1,000, as the case may be, times (y) a price (expressed as a percentage) intended to result in a yield to the final maturity of that series of Bonds (or, in the case of the 7.500% Bonds due 9/25/2024, a yield to September 25, 2023) as of the Settlement Date equal to the Reference Yield for that series of Bonds plus the Fixed Spread specified in the table above for that series of Bonds (the "Purchase Price"); and
• an amount in cash in U.S. dollars or euros, as the case may be, equal to the accrued and unpaid interest on your Bonds accepted for purchase up to (but not including) the Settlement Date.

The Republic will pay you the Purchase Price and accrued interest in the currency in which the Bonds are denominated. Accordingly, if you hold U.S. dollar-denominated Bonds, you will receive the Purchase Price and accrued interest in U.S. dollars; and if you hold euro-denominated Bonds, you will receive the Purchase Price and accrued interest in euros.

The "Reference Yield" for each series of Bonds will be equal to the rate, expressed as a percentage and rounded to three decimal places (with 0.0005% rounded up to 0.001%), determined by the Dealer Managers through linear interpolation of the mid-market U.S. dollar or euro, as the case may be, interest rate swap rates for the maturities occurring immediately before and immediately after the final maturity date of that series of Bonds (or, in the case of the September 2024 Bonds, September 25, 2023) as displayed on Bloomberg screen IRSB18 for U.S. dollar-denominated bonds and Bloomberg screen IRSB19 for euro-denominated bonds as of the Price Determination Time.

The Republic intends to spend a maximum of US$1.5 billion (the "Maximum Cash Consideration") for the aggregate Purchase Price of and accrued interest on the Bonds purchased pursuant to the Invitation. The Republic reserves the right, in its sole and absolute discretion, to increase or decrease the Maximum Cash Consideration and to terminate the Invitation for any reason. Offers will be accepted in accordance with, and in the order of, the Acceptance Priority Levels set forth in the table above. If the Maximum Cash Consideration is not adequate to purchase all of the Bonds offered in an Acceptance Priority Level, the Republic will determine which series of Bonds with that Acceptance Priority Level it will accept for purchase and may select one or more series of Bonds with that Acceptance Priority Level to be prorated on the basis of the same or different proration factors, all in its sole and absolute discretion.

The information in this announcement is only a summary. You may request a copy of the Invitation for Offers by contacting the Tender and Information Agent or any of the Dealer Managers at the addresses and telephone numbers set forth below, or you may download the Invitation for Offers at the Invitation website: www.bondcom.com/rop.

This announcement is not an offer or a solicitation of offers. The Invitation is made solely by means of the Invitation for Offers. The Invitation does not constitute, and may not be used in connection with, an offer or solicitation by anyone in any jurisdiction where an offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. Under no circumstances shall this notice constitute an offer to issue or the solicitation of an offer to buy or subscribe for securities in the Grand Duchy of Luxembourg.

The Tender and Information Agent for the Invitation is:

Bondholder Communications Group, LLC
Attention: Ruth Perez
E-mail: [email protected]
Website: www.bondcom.com/rop

SOURCE Republic of the Philippines