The state-run Home Guaranty Corp. is pursuing its planned bond float in the first half of the year to raise more funds to bankroll its guarantee service requirements and reduce debt.

Home Guaranty president Gonzalo Benjamin Bongolan told reporters yesterday that the company planned to raise P5.5 billion from the domestic market through the issuance of seven-year bonds.

Bongolan said the company would use proceeds of the planned fund-raising activity to refinance outstanding debt and enhance its guarantee capacity with the expected slowdown in the housing sector.

Home Guaranty in 2006 floated P12 billion worth of seven-year zero coupon bonds to bankroll its guaranty servicing requirements and cut outstanding obligations.

The issuance of the bonds due 2013 was perfectly timed as it fetched low interest rates. The first tranche of zero-coupon bonds drew 6.375 percent while the second tranche fetched a lower rate of 5.875 percent.

Bongolan said Home Guaranty expects a 13 percent growth in guarantee covers to P81.35 billion this year from the projected cover of P72 billion last year.

Home Guaranty is tasked to operate a credit guaranty program in support of government?s efforts to promote home ownership. It stimulates the flow of funds from both the government and private sectors for housing and urban development. Lawrence Agcaoili