| Fixed Rate Treasury Notes |
| Product Definition |
Dollar Linked Peso Notes (DLPNs) are direct and unconditional obligations of the national government and are issued by the Bureau of Treasury (BTr). They are interest bearing and carry a term of more than one year and can be traded in the secondary market before maturity. The notes track the movement of the Philippine Peso and US Dollar exchange rate. Payments of interest and principal are linked to the movement of the exchange rate and computed based on the foreign exchange factor.
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Features:
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| Issuer | : | National government |
| Term | : | 2 and 3 years |
| Tax feature | : | Interest income subject to 20% final withholding tax |
| Type of income | : | Tax paid income |
| Rate | : | Fixed for the life of the FXTN; based on lowest accepted yield to maturity on auction date |
| Coupon rate and computation | : | Base Rate * Foreign Exchange Factor * 180 / 360 |
| | Base rate is the coupon designated by the Issuer divided by 0.80 plus a spread of 50 basis points |
| | Foreign exchange factor = Php B Val/Php A Val |
| | Php B Val = spot Php/USD exchange rate one business date prior to coupon date
Php A Val = spot Php/USD exchange rate one business date prior to issue date |
| Coupon payment period | : | Payable semi-annually in arrears |
| Redemption computation | : | [Face Value / PHP_A_Val] * PHP_C_Val |
| | | Php A Val = spot Php/USD exchange rate one business day prior to issue date
Php C Val = sport Php/USD exchange rate one business date prior to maturity date |
| Manner of purchase | : | Auction or through secondary market |
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