The killer from Manila

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The killer from Manila

Rarely has a deal triggered such animosity: joint lead managers who couldn't bear the bookrunner; unreturned telephone calls; alleged breaches of a gentleman's agreement. That's if you believe the members of the syndicate. But if you believe the bookrunner, the other banks are "squawking" in their own dream world. Amid such squabbling, the $1 billion debut by the central bank of the Philippines had to be pulled at the last moment - leaving behind recriminations that will sour the Asian capital markets for years. Steven Irvine reports.

The Philippines angle


The national investor call that accompanied the inaugural yankee bond by the central bank of the Philippines was nothing if not sexy.

Investors who dialled up on April 10 to hear the central bank governor and ask him questions were left mystified. "Welcome to the world of wet bodies," began the young male American voice. The recording went on to inform them that this was a "muscle fantasy line where young hunky male bodybuilders know how to train real hard". Training real hard cost $3.99 a minute, but "you must be over 18".

Dial-in calls are designed for those investors who cannot make it to roadshow presentations, and several had called in. Only then did lead manager Salomon Brothers realize there had been a hitch - the transposition of two digits in the 1-800 number distributed to the investment community.

The following day the deal was postponed, nearly a week into its US roadshows. The official line from the issuer, Banco Sentral ng Pilipinas, was that a spread of 220 basis points over US treasuries did not reflect "the appropriate credit spread for the Philippines".


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