Sir,
The recent Euromoney article entitled "The killer in Manila" contains a number of unsubstantiated implications, exaggerations and misrepresentations concerning our role in bringing Bangko Sentral ng Pilipinas (BSP) to the yankee bond market.
We would like to make three points.
First, as the accompanying letter makes clear, all six managers unanimously agreed that postponement of the offering was entirely appropriate given market conditions and the Philippines' main objective: providing a liquid long-term pricing benchmark to enhance the funding opportunity for future Philippine borrowing initiatives. We commend the letter to your attention, and note the cooperative spirit among the co-managers.
Second, suggestions that Salomon Brothers proposed discount fees or unusual expense arrangements to win the mandate are simply untrue.
And third, the story alleges that investors who called in for the BSP conference call were connected to a wrong number. An incorrect number resulting from transposing digits was initially furnished to our sales force and to the co-managers. However, that mistake was corrected quickly. The correct number was confirmed to all co-managers and potential investors at least three hours prior to the actual conference call. The result was a successful conference call, with full participation by the anticipated group of investors.
Yours sincerely,
Deryck Maughan,
chairman and chief executive
Salomon Brothers
May 5 1997
Governor Hon. Gabriel C Singson
Bangko Sentral ng Pilipinas
Room 509, 5/F Executive Tower
BSP Complex Harrison
Manila, Philippines
Dear Governor Singson,
We, your managers, fully support the decision of the Bangko Sentral ng Philippines to temporarily postpone its recent Yankee bond issue.
This decision was undertaken after careful consideration and thorough evaluation of all relevant market factors and we believe it is in the best interest of the country. In our collective judgement market conditions at the point of launch simply did not warrant proceeding keeping in mind the clear objective of the Bank to obtain the full financial benefit due the country as a result of the substantial economic progress of the Philippines.
We remain highly confident that in the future, the Philippines will achieve the proper positive recognition in the financial markets that you deserve, further vindicating your recent decision to postpone.
We also fully endorse the progress of selection of the bookrunner, and other members of the management group as conducted by you and your staff. The methodology and rigour were exemplary and the decision to select six leading houses to work on this important financing together was above reproach. We are all honored to be a part of this team.
We remain firmly committed to you, Bangko Sentral ng Pilipinas, and the Philippines. We dedicate ourselves to work together harmoniously to ensure the best results for you, our client. You can rely on our further continued support and we look forward to working for you in the future.
Yours sincerely,
Trevor Rowe
Salomon Brothers
Vaughn Montes
Citicorp
Renato de Guzman
ING Barings
Cezar Consing
JP Morgan
Stephen Cu-Unjieng
Merill Lynch
Bing Shen
Morgan Stanley