Filed Pursuant to Rule 424(b)(5)
Registration No. 333-114312
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED APRIL 15, 2004
[REPUBLIC OF THE PHILIPPINES LOGO]
US$200,000,000
REPUBLIC OF THE PHILIPPINES
8.25% GLOBAL BONDS DUE 2014
----------------------
The Republic will pay interest on the global bonds each January 15 and July 15.
The first interest payment on the global bonds will be made on July 15, 2004.
The global bonds will constitute a further issuance of, are fungible with and
are consolidated and form a single series with, the 8.25% Global Bonds due 2014
issued by the Republic on July 15, 2003 and on October 23, 2003. The total
principal amount of the previously issued global bonds and the global bonds now
being issued is $1,700,000,000. The Republic may not redeem the global bonds
prior to their maturity.
The offering of the global bonds is conditional on the receipt of certain
approvals of the Monetary Board of the Bangko Sentral ng Pilipinas, the central
bank of the Republic.
The global bonds are being offered globally for sale in the jurisdictions where
it is lawful to make such offers and sales. We have applied to list the global
bonds on the Luxembourg Stock Exchange. The global bonds will be listed on the
basis of a Prospectus Supplement dated April 27, 2004, as a supplement to the
base prospectus dated April 15, 2004, which will be filed with the Luxembourg
Stock Exchange and will be made available at the office of the Luxembourg paying
and transfer agent.
<Table>
<Caption>
PER BOND TOTAL
-------- ------------
Price to investors(1)............................. 98.454% $196,908,000
Underwriting discounts and commissions............ 0.125% $ 250,000
Proceeds, before expenses, to the Republic........ 98.329% $196,658,000
</Table>
- ---------------
(1) Plus accrued interest from and including January 15, 2004. Purchasers
of the global bonds will be entitled to receive the regular semi-annual
interest payment due on July 15, 2004.
Neither the Securities and Exchange Commission nor any other regulatory body has
approved or disapproved of these securities or determined that this prospectus
supplement or the prospectus to which it relates is truthful or complete. Any
representation to the contrary is a criminal offense.
We expect to deliver the global bonds to investors in registered book-entry form
only through the facilities of The Depository Trust Company, Clearstream
Banking, societe anonyme, and Euroclear Bank, S.A./N.V., as operator of the
Euroclear System, on or about May 4, 2004.
Joint Lead Managers and Joint Bookrunners
DEUTSCHE BANK SECURITIES MORGAN STANLEY
----------------------
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS APRIL 27, 2004.
[MAP]
TABLE OF CONTENTS
<Table>
<Caption>
PROSPECTUS SUPPLEMENT PAGES
- ------------------------------------- -----
INTRODUCTORY STATEMENTS.............. S-3
SUMMARY OF THE OFFERING.............. S-5
USE OF PROCEEDS...................... S-8
RECENT DEVELOPMENTS.................. S-9
DESCRIPTION OF THE GLOBAL BONDS...... S-10
GLOBAL CLEARANCE AND SETTLEMENT...... S-13
TAXATION............................. S-16
UNDERWRITING......................... S-18
LEGAL MATTERS........................ S-21
GENERAL INFORMATION.................. S-21
</Table>
<Table>
<Caption>
PROSPECTUS PAGES
- ------------------------------------- -----
CERTAIN DEFINED TERMS AND
CONVENTIONS........................ 2
FORWARD LOOKING STATEMENTS........... 2
DATA DISSEMINATION................... 3
USE OF PROCEEDS...................... 3
PROSPECTUS SUMMARY................... 4
REPUBLIC OF THE PHILIPPINES.......... 9
DESCRIPTION OF THE SECURITIES........ 85
COLLECTIVE ACTION SECURITIES......... 96
TAXATION............................. 100
PLAN OF DISTRIBUTION................. 108
VALIDITY OF THE SECURITIES........... 109
AUTHORIZED REPRESENTATIVE IN THE
UNITED STATES...................... 109
EXPERTS; OFFICIAL STATEMENTS AND
DOCUMENTS.......................... 109
FURTHER INFORMATION.................. 109
DEBT TABLES OF THE REPUBLIC OF THE
PHILIPPINES........................ T-1
</Table>
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YOU SHOULD READ THIS PROSPECTUS SUPPLEMENT ALONG WITH THE ATTACHED
PROSPECTUS THAT ACCOMPANIES IT. YOU SHOULD RELY ONLY ON THE INFORMATION
CONTAINED OR INCORPORATED BY REFERENCE IN THIS DOCUMENT AND THE ACCOMPANYING
PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT
IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL TO SELL THESE
SECURITIES. THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS MAY
BE ACCURATE ONLY ON THE DATE OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, AS
APPLICABLE. TERMS USED HEREIN BUT NOT OTHERWISE DEFINED SHALL HAVE THE MEANING
GIVEN TO THEM IN THE PROSPECTUS THAT ACCOMPANIES THIS PROSPECTUS SUPPLEMENT.
------------------------
INTRODUCTORY STATEMENTS
The Republic accepts responsibility for the information provided by it that
is contained in this prospectus supplement and the prospectus that accompanies
it. To the best of the knowledge and belief of the Republic (which has taken all
reasonable care to ensure that such is the case), the information contained in
this prospectus supplement and the accompanying prospectus provided by the
Republic is in accordance with the facts and does not omit anything likely to
affect the import of such information.
The Republic is a foreign sovereign state. Consequently, it may be
difficult for you to obtain or realize upon judgments of courts in the United
States against the Republic. See "Description of the Securities -- Description
of the Debt Securities -- Jurisdiction and Enforceability" in the accompanying
prospectus.
The distribution of this prospectus supplement and the accompanying
prospectus and the offering of the global bonds may be legally restricted in
some countries. If you wish to distribute this prospectus supplement or the
accompanying prospectus, you should observe any applicable restrictions. This
prospectus supplement and the accompanying prospectus should not be considered
an offer, and it is prohibited to use them to make an offer, in any state or
country in which the making of this offering of the bonds is prohibited. For a
S-3
description of some restrictions on the offering and sale of the global bonds
and the distribution of this prospectus supplement and the accompanying
prospectus, see "Underwriting" on page S-18.
Unless otherwise indicated, all references in this prospectus supplement to
"Philippine pesos", "pesos" or "P" are to the lawful national currency of the
Philippines, those to "dollars", "US dollars" or "$" are to the lawful currency
of the United States of America and those to "SDR" are to Special Drawing Rights
of the International Monetary Fund.
All references in this prospectus supplement to (a) the "Republic" or the
"Philippines" are to the Republic of the Philippines, (b) the "Government" are
to the national government of the Philippines, (c) the "administration" are to
the current administration of President Gloria Macapagal-Arroyo and (d) "Bangko
Sentral" are to Bangko Sentral ng Pilipinas, the central bank of the
Philippines.
S-4
SUMMARY OF THE OFFERING
This summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information appearing elsewhere in this
prospectus supplement and the prospectus to which it relates.
ISSUER........................ Republic of the Philippines.
BONDS......................... $200,000,000 aggregate principal amount of
8.25% global bonds due 2014. The global bonds
constitute a further issuance of, and upon
issuance will be fungible with and consolidated
and form a single series with, the 8.25% Global
Bonds due 2014 issued by the Republic on July
15, 2003, in the amount of $750,000,000, and
the 8.25% Global Bonds due 2014 issued by the
Republic on October 23, 2003, in the amount of
$750,000,000. Upon issuance, the global bonds
will rank pari passu with the previously issued
global bonds in all respects. The total
principal amount of the previously issued
global bonds and the global bonds now being
issued is $1,700,000,000.
INTEREST...................... The global bonds will bear interest at 8.25%
per year from January 15, 2004, payable
semi-annually in arrears.
INTEREST PAYMENT DATES........ January 15 and July 15 of each year, commencing
on July 15, 2004, payable to the persons who
are registered holders thereof at the close of
business on the preceding January 1 or July 1,
as applicable, whether or not a business day.
ISSUER REDEMPTION............. The Republic may not redeem the global bonds
prior to maturity.
STATUS OF BONDS............... The global bonds will be direct, unconditional,
unsecured and general obligations of the
Republic. Except as otherwise described, the
global bonds will at all times rank at least
equally among themselves and with all other
unsecured and unsubordinated External
Indebtedness (as defined in the accompanying
prospectus) of the Republic. The full faith and
credit of the Republic will be pledged for the
due and punctual payment of all principal and
interest on the global bonds. See "Description
of the Securities -- Description of Debt
Securities -- Status of Bonds" in the
accompanying prospectus.
NEGATIVE PLEDGE............... With certain exceptions, the Republic has
agreed that it will not create or permit to
subsist any Lien (as defined in the
accompanying prospectus) on its revenues or
assets to secure External Public Indebtedness
(as defined in the accompanying prospectus) of
the Republic, unless at the same time or prior
thereto, the global bonds are secured at least
equally and ratably with such External Public
Indebtedness. The international reserves of
Bangko Sentral ng Pilipinas ("Bangko Sentral")
represent substantially all of the official
gross international reserves of the Republic.
Because Bangko Sentral is an independent
entity, the Republic and Bangko Sentral believe
that the international reserves owned by Bangko
Sentral are not subject to the negative pledge
covenant in the global bonds and that Bangko
Sentral could in the future incur External
Public Indebtedness secured by such reserves
without securing amounts payable under the
global bonds. See "Description of the
Securities -- Description of Debt
Securities -- Negative Pledge Covenant" in the
accompanying prospectus.
S-5
TAXATION...................... The Republic will make all payments of
principal and interest in respect of the global
bonds free and clear of, and without
withholding or deducting, any present or future
taxes of any nature imposed by or within the
Republic, unless required by law. In that
event, the Republic will pay additional amounts
so that the holders of the global bonds receive
the amounts that would have been received by
them had no withholding or deduction been
required. See "Description of the
Securities -- Description of Debt Securities --
Additional Amounts" in the accompanying
prospectus. For a description of certain United
States tax aspects of the global bonds, see
"Taxation -- United States Tax Considerations"
in the accompanying prospectus, and
"Taxation -- United States Taxation".
CROSS-DEFAULTS................ Events of default with respect to the global
bonds include (i) if the Republic fails to make
a payment of principal, premium, prepayment
charge or interest when due on any External
Public Indebtedness with a principal amount
equal to or greater than $25,000,000 or its
equivalent, and this failure continues beyond
the applicable grace period; or (ii) if any
External Public Indebtedness of the Republic or
the central monetary authority in principal
amount equal to or greater than $25,000,000 is
accelerated, other than by optional or
mandatory prepayment or redemption. See
"Description of the Securities -- Description
of the Debt Securities -- Events of Default:
Cross Default and Cross Acceleration" in the
accompanying prospectus.
LISTING....................... The Republic is offering the global bonds for
sale in the United States and elsewhere where
such offer and sale is permitted. The Republic
has applied to have the global bonds listed and
traded in accordance with the rules of the
Luxembourg Stock Exchange. The Republic cannot
guarantee that the application to the
Luxembourg Stock Exchange will be approved, and
settlement of the global bonds is not
conditioned on obtaining the listing.
FORM, DENOMINATION AND
REGISTRATION.................. The global bonds will be issued in fully
registered form in minimum denominations of
$2,000 and integral multiples of $1,000 in
excess thereof. The global bonds will be
represented by one or more global securities
registered in the name of a depositary, its
nominee or a custodian. Beneficial interests in
the global securities will be shown on, and the
transfer thereof will be effected only through,
records maintained by the depositary and its
direct and indirect participants. Settlement of
all secondary market trading activity in the
global bonds will be made in immediately
available funds. See "Description of the
Securities -- Description of the Debt
Securities -- Global Securities" in the
accompanying prospectus.
FURTHER ISSUES................ The Republic may from time to time, without
notice to or the consent of the registered
holders of global bonds, issue further bonds
which will form a single series with the global
bonds. See "Description of the
Securities -- Description of the Debt
Securities -- Further Issues of Debt
Securities" in the accompanying prospectus, and
"Description of the Global Bonds -- Further
Issues".
S-6
USE OF PROCEEDS............... The Republic intends to use the net proceeds
from the sale of the global bonds to provide
capital to National Power Corporation for its
use in meeting its financing requirements.
FISCAL AGENT.................. JPMorgan Chase Bank.
GOVERNING LAW................. The fiscal agency agreement and the global
bonds will be governed by and interpreted in
accordance with the laws of the State of New
York. The laws of the Republic will govern all
matters governing authorization and execution
of the global bonds by the Republic.
S-7
USE OF PROCEEDS
The Republic intends to use the net proceeds from the sale of the global
bonds to provide capital to National Power Corporation for its use in meeting
its financing requirements.
S-8
RECENT DEVELOPMENTS
The information in this section supplements the information about the
Republic that is included in the accompanying prospectus dated April 15, 2004.
INTERNAL CONFLICT WITH REBEL GROUPS
The Arroyo administration indicated that it would postpone further peace
negotiations with the Moro Islamic Liberation Front ("MILF") and the National
Democratic Front ("NDF") until after the presidential elections planned for May
10, 2004.
TRADE IN GOODS
The Republic's balance of trade in goods, as reported by the National
Statistics Office, recorded a deficit of $330 million for the first two months
of 2004, compared with a deficit of $213 million for the first two months of
2003. Imports of goods for the first two months of 2004 were $6.2 billion, 7.7%
more than in the same period in 2003. The increase in imports was driven
primarily by a 14.6% year-on-year increase in electronic products, which
accounted for 47.2% of total imported goods. Exports of goods for the first two
months of 2004 were $5.8 billion, 5.8% more than in the same period in 2003.
BANKING SYSTEM NON-PERFORMING LOANS
The banking system's non-performing loan ("NPL") ratio declined to 14.2% in
February 2004 from 14.5% in January 2004. Although there was a net increase of
1.7% in total NPLs, the total loan portfolio expanded by 3.4%, causing the NPL
ratio to decline. The NPL coverage ratio (loan reserves to non-performing loans)
stood at 52.0% in February 2004, a decline from the 53.1% recorded in January
2004.
PESO/US$ EXCHANGE RATE
On April 27, 2004, the peso to US dollar exchange rate was P55.66 per US
dollar, compared to P56.18 per US dollar as of April 13, 2004.
PHILIPPINE SECURITIES MARKETS
As of April 27, 2004, the Philippine Stock Exchange composite index closed
at 1596.93, compared to a close of 1516.81 on April 6, 2004 and 1442.37 on
December 30, 2003.
REVENUES AND EXPENDITURES
Total government revenues for the first three months of 2004 were P152.6
billion, reflecting a 12.0% increase from the P136.3 billion in revenues for the
first three months of 2003. BIR collections in the first three months of 2004
were P99.0 billion, a 10.1% increase from BIR collections in the same period of
2003, due in part to continued improvement in collections from the Large
Taxpayers' Service and the Regional Offices. Bureau of Customs revenues were
P29.2 billion in the first three months of 2004, an increase of 9.3% from the
same period of 2003, attributable mainly to higher imports in the semiconductor
and electronics sectors. Remittances to the Bureau of Treasury were P16.1
billion in the first three months of 2004, an increase of 19.7% from the same
period of 2003, due in part to dividend remittances from Bangko Sentral and
Development Bank of the Philippines. Revenues from other government offices
accounted for P8.3 billion, an increase of 34.6% from the same period in 2003.
Total government expenditures for the first three months of 2004 were
P209.5 billion, 7.3% more than the P195.2 billion in expenditures for the first
three months of 2003. The year-on-year increase in expenditures was attributable
mostly to a 31.6% increase in infrastructure expense and an 11.0% increase in
interest payments, in each case from the first three months of 2003 to the first
three months of 2004. However, maintenance and operating expenditures and
personnel expenditures both declined slightly from the first three months of
2003 to the first three months of 2004, reflecting the re-enactment of the 2003
budget in 2004.
Overall, the government fiscal deficit stood at P56.8 billion for the first
three months of 2004, 3.5% smaller than the fiscal deficit of 58.9% recorded for
the first three months of 2003.
S-9
DESCRIPTION OF THE GLOBAL BONDS
GENERAL
The global bonds will be issued under a fiscal agency agreement, dated as
of October 4, 1999, as amended by a supplement to the fiscal agency agreement
dated February 26, 2004, between the Republic and JPMorgan Chase Bank, as fiscal
agent. The global bonds and the previously issued global bonds due 2014 referred
to below constitute a single series. The global bonds are a series of debt
securities more fully described in the accompanying prospectus, except to the
extent indicated below. The following statements are subject to the provisions
of the fiscal agency agreement, the supplement to the fiscal agency agreement
and the global bonds. This summary does not purport to be complete and the
description below may not contain all of the information that is important to
you as a potential investor in the global bonds. The Republic has filed forms of
these documents as exhibits to the registration statement numbered 333-108310.
You should refer to the exhibits for more complete information. Capitalized
terms not defined below shall have the respective meanings given in the
accompanying prospectus.
The global bonds will:
- be a further issuance in an aggregate principal amount of $200,000,000,
for a total issuance of $1,700,000,000;
- bear interest at 8.25% per year from January 15, 2004;
- mature at par on January 15, 2014;
- pay interest on January 15 and July 15 of each year, commencing July 15,
2004; and
- pay interest to the persons in whose names the global bonds are
registered on the record date, which is the close of business on the
preceding January 1 or July 1 (whether or not a business day), as the
case may be. Interest will be calculated on the basis of a 360-day year,
consisting of twelve 30-day months.
The global bonds constitute a further issuance of, are fungible with and
are consolidated and form a single series with, the 8.25% Global Bonds due 2014
issued by the Republic on July 15, 2003 in the amount of $750,000,000 and the
8.25% Global Bonds due 2014 issued by the Republic on October 23, 2003 in the
amount of $750,000,000. Upon issuance, the global bonds will rank pari passu
with the previously issued global bonds in all respects. The total principal
amount of the previously issued global bonds and the global bonds now being
issued is $1,700,000,000.
The Republic has applied to the Luxembourg Stock Exchange for listing of,
and permission to deal in, the global bonds in accordance with the rules of the
Luxembourg Stock Exchange. We cannot guarantee that the application to the
Luxembourg Stock Exchange will be approved, and settlement of the global bonds
is not conditioned on obtaining the listing.
BOOK ENTRY
The Republic will issue the global bonds in the form of fully registered
global securities. The Republic will deposit the global securities with DTC and
register the global securities in the name of Cede & Co. as DTC's nominee.
Beneficial interests in the global securities will be represented by, and
transfers thereof will be effected only through, book-entry accounts maintained
by DTC and its participants.
CERTIFICATED SECURITIES
In circumstances detailed in the accompanying prospectus (see "Description
of the Securities -- Description of the Debt Securities -- Global Securities --
Registered Ownership of the Global Security"), the Republic could issue
certificated securities. The Republic will only issue certificated securities in
fully registered form in minimum denominations of $2,000 and integral multiples
of $1,000 in excess thereof. The holders of certificated securities shall
present directly at the corporate trust office of the fiscal agent, at the
office of the Luxembourg paying and transfer agent or at the office of any other
transfer agent as the Republic
S-10
may designate from time to time all requests for the registration of any
transfer of such securities, for the exchange of such securities for one or more
new certificated securities in a like aggregate principal amount and in
authorized denominations and for the replacement of such securities in the cases
of mutilation, destruction, loss or theft. Certificated securities issued as a
result of any partial or whole transfer, exchange or replacement of the global
bonds will be delivered to the holder at the corporate trust office of the
fiscal agent, at the office of the Luxembourg paying and transfer agent or at
the office of any other transfer agent, or (at the risk of the holder) sent by
mail to such address as is specified by the holder in the holder's request for
transfer, exchange or replacement.
REGISTRATION AND PAYMENTS
The Republic will pay the principal amount of a global bond on its maturity
date in immediately available funds in the City of New York upon presentation of
the global bond at the office of the fiscal agent in the City of New York or,
subject to applicable law and regulations, at the office outside the United
States of any paying agent, including the Luxembourg paying agent (if the global
bonds are listed on the Luxembourg Stock Exchange and the rules of the exchange
so require).
The Republic will appoint the fiscal agent as registrar, principal paying
agent and transfer agent of the global bonds. In these capacities, the fiscal
agent will, among other things:
- maintain a record of the aggregate holdings of global bonds represented
by the global securities and any certificated securities and accept
global bonds for exchange and registration of transfer;
- ensure that payments of principal and interest in respect of the global
bonds received by the fiscal agent from the Republic are duly paid to the
depositaries for the global securities or their respective nominees and
any other holders of any global bonds; and
- transmit to the Republic any notices from holders of any of the global
bonds.
For as long as global bonds are listed on the Luxembourg Stock Exchange,
and the rules of the Luxembourg Stock Exchange so require, the Republic will
appoint and maintain a paying agent and a transfer agent in Luxembourg, who
shall initially be Deutsche Bank Luxembourg, S.A. Holders of certificated global
bonds will be able to receive payments thereon and effect transfers thereof at
the offices of the Luxembourg paying and transfer agent. For so long as the
global bonds are listed on the Luxembourg Stock Exchange, the Republic will
publish any change as to the identity of the Luxembourg paying and transfer
agent in a leading newspaper in Luxembourg, which is expected to be the
Luxemburger Wort.
REDEMPTION AND SINKING FUND
The Republic may not redeem the global bonds prior to maturity. The
Republic will not provide a sinking fund for the amortization and retirement of
the global bonds.
FURTHER ISSUES
For a description of the Republic's ability from time to time to issue
further bonds that will form a single series with the global bonds, see
"Description of the Securities -- Description of the Debt Securities -- Further
Issues of Debt Securities" in the accompanying prospectus.
REGARDING THE FISCAL AGENT
The fiscal agent has its principal corporate trust office at 4 New York
Plaza, 15th Floor, New York, New York 10004. The Republic will at all times
maintain a paying agent and a transfer agent in the City of New York which will,
unless otherwise provided, be the fiscal agent. The Republic may maintain
deposit accounts and conduct other banking transactions in the ordinary course
of business with the fiscal agent. The fiscal agent will be the agent of the
Republic, not a trustee for holders of any global bonds. Accordingly, the fiscal
agent will not have the same responsibilities or duties to act for such holders
as would a trustee, except
S-11
that monies held by the fiscal agent as payment of principal of (and premium, if
any) or interest on the global bonds shall be held by the fiscal agent in trust
for the holders of the global bonds.
The fiscal agency agreement and the supplement to the fiscal agency
agreement are not required to be qualified under the US Trust Indenture Act of
1939. Accordingly, the fiscal agency agreement and the supplement to the fiscal
agency agreement may not contain all of the provisions which could be beneficial
to holders of the global bonds which would be contained in an indenture
qualified under the Trust Indenture Act.
NOTICES
So long as the global bonds are listed on the Luxembourg Stock Exchange,
all notices will be published in Luxembourg in a leading newspaper of general
circulation in Luxembourg, which is expected to be the Luxemburger Wort. If the
Republic cannot, for any reason, publish notice in this newspaper, it will
choose an appropriate leading newspaper of general circulation in Luxembourg,
and notice in that newspaper will be considered valid notice. Notice will be
considered made as of the first date of its publication.
S-12
GLOBAL CLEARANCE AND SETTLEMENT
The Depository Trust Company ("DTC"), Euroclear and Clearstream, Luxembourg
have established links among themselves to facilitate the initial settlement of
the global bonds and cross-market transfers of the global bonds in secondary
market trading. DTC will be linked to JPMorgan Chase Bank, a New York banking
corporation, as depositary of the Euroclear System ("Euroclear"), and Citibank,
N.A., as depositary for Clearstream Banking, societe anonyme ("Clearstream,
Luxembourg") (the "Clearing System Depositaries").
Although DTC, Euroclear and Clearstream, Luxembourg have agreed to the
procedures provided below to facilitate transfers of global bonds among
participants of DTC, Euroclear and Clearstream, Luxembourg, they are under no
obligation to perform such procedures. In addition, such procedures may be
modified or discontinued at any time. Neither the Republic nor the Fiscal Agent
will have any responsibility for the performance by DTC, Euroclear or
Clearstream, Luxembourg or their respective participants or indirect
participants of the respective obligations under the rules and procedures
governing their operations.
THE CLEARING SYSTEMS
THE DEPOSITORY TRUST COMPANY. DTC is:
- a limited-purpose trust company organized under the New York Banking Law;
- a "banking organization" under the New York Banking Law;
- a member of the Federal Reserve System;
- a "clearing corporation" under the New York Uniform Commercial Code; and
- a "clearing agency" registered under Section 17A of the US Securities
Exchange Act of 1934.
DTC was created to hold securities for its participants and facilitate the
clearance and settlement of securities transactions between its participants. It
does this through electronic book-entry settlement in the accounts of its direct
participants, eliminating the need for physical movement of securities
certificates. DTC is owned by a number of its direct participants and by the New
York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc.
DTC can act only on behalf of its direct participants, who in turn act on
behalf of indirect participants and certain banks. In addition, unless a global
security is exchanged in whole or in part for a definitive security, it may not
be physically transferred, except as a whole among DTC, its nominees and their
successors. Therefore, your ability to pledge a beneficial interest in the
global security to persons that do not participate in the DTC system, and to
take other actions, may be limited because you will not possess a physical
certificate that represents your interest.
EUROCLEAR AND CLEARSTREAM, LUXEMBOURG. Like DTC, Euroclear and
Clearstream, Luxembourg hold securities for their participants and facilitate
the clearance and settlement of securities transactions between their
participants through electronic book-entry settlement in their accounts.
Euroclear and Clearstream, Luxembourg provide various services to their
participants, including the safekeeping, administration, clearance and
settlement and lending and borrowing of internationally traded securities.
Euroclear and Clearstream, Luxembourg participants are financial institutions
such as underwriters, securities brokers and dealers, banks, trust companies and
other organizations. Other banks, brokers, dealers and trust companies have
indirect access to Euroclear or Clearstream, Luxembourg by clearing through or
maintaining a custodial relationship with a Euroclear or Clearstream, Luxembourg
participant.
INITIAL SETTLEMENT
If you plan to hold your interests in the securities through DTC, you will
follow the settlement practices applicable to global security issues. If you
plan to hold your interests in the securities through Euroclear or Clearstream,
Luxembourg, you will follow the settlement procedures applicable to conventional
Eurobonds in registered form. If you are an investor on the settlement date, you
will pay for the global bonds by wire transfer
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and the entity through which you hold your interests in the global bonds will
credit your securities custody account.
SECONDARY MARKET TRADING
The purchaser of securities determines the place of delivery in secondary
market trading. Therefore, it is important for you to establish at the time of
the trade where both the purchaser's and seller's accounts are located to ensure
that settlement can be made on the desired value date (i.e., the date specified
by the purchaser and seller on which the price of the securities is fixed).
TRADING BETWEEN DTC PARTICIPANTS. DTC participants will transfer interests
in the securities among themselves in the ordinary way according to the rules
and operating procedures of DTC governing global security issues. Participants
will pay for these transfers by wire transfer.
TRADING BETWEEN EUROCLEAR AND/OR CLEARSTREAM, LUXEMBOURG
PARTICIPANTS. Euroclear and Clearstream, Luxembourg participants will transfer
interests in the securities among themselves in the ordinary way according to
the rules and operating procedures of Euroclear and Clearstream, Luxembourg
governing conventional Eurobonds. Participants will pay for these transfers by
wire transfer.
TRADING BETWEEN A DTC SELLER AND A EUROCLEAR OR CLEARSTREAM, LUXEMBOURG
PURCHASER. When the securities are to be transferred from the account of a DTC
participant to the account of a Euroclear or Clearstream, Luxembourg
participant, the purchaser must first send instructions to Euroclear or
Clearstream, Luxembourg through a participant at least one business day before
the settlement date for such securities. Euroclear or Clearstream, Luxembourg
will then instruct its depositary to receive the securities and make payment for
them. On the settlement date for such securities, the depositary will make
payment to the DTC participant's account and the securities will be credited to
the depositary's account. After settlement has been completed, DTC will credit
the securities to Euroclear or Clearstream, Luxembourg, and in turn Euroclear or
Clearstream, Luxembourg will credit the securities, in accordance with its usual
procedures, to the participant's account, and the participant will then credit
the purchaser's account. These securities credits will appear the next day
(European time) after the settlement date. The cash debit from the account of
Euroclear or Clearstream, Luxembourg will be back-valued to the value date,
which will be the preceding day if settlement occurs in New York. If settlement
is not completed on the intended value date (i.e., the trade fails), the cash
debit will instead be valued at the actual settlement date.
Participants in Euroclear and Clearstream, Luxembourg will need to make
funds available to Euroclear or Clearstream, Luxembourg in order to pay for the
securities by wire transfer on the value date. The most direct way of doing this
is to preposition funds (i.e., have funds in place at Euroclear or Clearstream,
Luxembourg before the value date), either from cash on hand or from existing
lines of credit. Under this approach, however, participants may take on credit
exposure to Euroclear and Clearstream, Luxembourg until the securities are
credited to their accounts one day later.
As an alternative, if Euroclear or Clearstream, Luxembourg has extended a
line of credit to a participant, the participant may decide not to preposition
funds, but to allow Euroclear or Clearstream, Luxembourg to draw on the line of
credit to finance settlement for the securities. Under this procedure, Euroclear
or Clearstream, Luxembourg would charge the participant overdraft charges for
one day, assuming that the overdraft would be cleared when the securities were
credited to the participant's account. However, interest on the securities would
accrue from the value date. Therefore, in many cases the interest income on
securities which the participant earns during that one-day period will
substantially reduce or offset the amount of the participant's overdraft
charges. Of course, this result will depend on the cost of funds to (i.e., the
interest rate that Euroclear or Clearstream, Luxembourg charges) each
participant.
Since the settlement will occur during New York business hours, a DTC
participant selling an interest in the securities can use its usual procedures
for transferring global securities to the Clearing System Depositaries of
Euroclear or Clearstream, Luxembourg for the benefit of Euroclear or
Clearstream, Luxembourg participants. The DTC seller will receive the sale
proceeds on the settlement date. Thus, to the DTC seller, a cross-market sale
will settle no differently than a trade between two DTC participants.
S-14
Finally, day traders that use Euroclear or Clearstream, Luxembourg and that
purchase global bonds from DTC participants for credit to Euroclear participants
or Clearstream, Luxembourg participants should note that these trades will
automatically fail on the sale side unless one of the following three steps is
taken:
- borrowing through Euroclear or Clearstream, Luxembourg for one day, until
the purchase side of the day trade is reflected in their Euroclear
account or Clearstream, Luxembourg account, in accordance with the
clearing system's customary procedures;
- borrowing the global bonds in the United States from a DTC participant no
later than one day prior to settlement, which would give the global bonds
sufficient time to be reflected in the borrower's Euroclear account or
Clearstream, Luxembourg account in order to settle the sale side of the
trade; or
- staggering the value dates for the buy and sell sides of the trade so
that the value date of the purchase from the DTC participant is at least
one day prior to the value date for the sale to the Euroclear participant
or Clearstream, Luxembourg participant.
TRADING BETWEEN A EUROCLEAR OR CLEARSTREAM, LUXEMBOURG SELLER AND A DTC
PURCHASER. Due to time zone differences in their favor, Euroclear and
Clearstream, Luxembourg participants can use their usual procedures to transfer
securities through their Clearing System Depositaries to a DTC participant. The
seller must first send instructions to Euroclear or Clearstream, Luxembourg
through a participant at least one business day before the settlement date.
Euroclear or Clearstream, Luxembourg will then instruct its depositary to credit
the securities to the DTC participant's account and receive payment. The payment
will be credited in the account of the Euroclear or Clearstream, Luxembourg
participant on the following day, but the receipt of the cash proceeds will be
back valued to the value date, which will be the preceding day if settlement
occurs in New York. If settlement is not completed on the intended value date
(i.e., the trade fails), the receipt of the cash proceeds will instead be valued
at the actual settlement date.
If the Euroclear or Clearstream, Luxembourg participant selling the
securities has a line of credit with Euroclear or Clearstream, Luxembourg and
elects to be in debit for the securities until it receives the sale proceeds in
its account, then the back-valuation may substantially reduce or offset any
overdraft charges that the participant incurs over that one-day period.
S-15
TAXATION
The following discussion summarizes certain U.S. federal income and estate
tax and Philippine tax considerations that may be relevant to you if you invest
in global bonds. This summary is based on laws, regulations, rulings and
decisions now in effect in the United States and on laws and regulations in
effect in the Philippines and may change. Any change could apply retroactively
and could affect the continued validity of this summary.
This summary does not describe all of the tax considerations that may be
relevant to you in your situation, particularly if you are subject to special
tax rules.
GENERAL
The Republic urges you to consult your own tax advisors to determine your
particular tax consequences in respect of participating in the offering, and of
owning and selling the global bonds.
PHILIPPINE TAXATION
The following is a summary of certain Philippine tax consequences that may
be relevant to non-Philippine holders of the global bonds in connection with the
holding and disposition of the global bonds. The Republic uses the term
"non-Philippine holders" to refer to (i) non-residents of the Philippines who
are neither citizens of the Philippines nor are engaged in trade or business
within the Philippines or (ii) non-Philippine corporations not engaged in trade
or business in the Philippines.
This summary is based on Philippine laws, rules, and regulations now in
effect, all of which are subject to change. It is not intended to constitute a
complete analysis of the tax consequences under Philippine law of the receipt,
ownership, or disposition of the global bonds, in each case by non-Philippine
holders, nor to describe any of the tax consequences that may be applicable to
residents of the Republic.
EFFECT OF HOLDING GLOBAL BONDS. Payments by the Republic of principal of
and interest on the global bonds to a non-Philippine holder will not subject
such non-Philippine holder to taxation in the Philippines by reason solely of
the holding of the global bonds or the receipt of principal or interest in
respect thereof.
TAXATION OF INTEREST ON THE GLOBAL BONDS. When the Republic makes payments
of principal and interest to you on the global bonds, no amount will be withheld
from such payments for, or on account of, any taxes of any kind imposed, levied,
withheld or assessed by the Philippines or any political subdivision or taxing
authority thereof or therein.
TAXATION OF CAPITAL GAINS. Under the Philippine Tax Code, any gain
realized from the sale, exchange or retirement of securities with an original
maturity of more than five years from the date of issuance will not be subject
to income tax. Since the global bonds have a maturity of more than five years
from the date of issuance, any gains realized by a holder of the global bonds
will not be subject to Philippine income tax. Non-Philippine holders of the
global bonds will not be subject to Philippine income or withholding tax in
connection with the sale, exchange, or retirement of a global bond if such sale,
exchange or retirement is made outside the Philippines or an exemption is
available under an applicable tax treaty in force between the Philippines and
the country of domicile of the non-Philippine holder.
DOCUMENTARY STAMP TAXES. No documentary stamp tax is imposed upon the
transfer of the global bonds. A documentary stamp tax, at the rate of P1.00 for
every P200, or fractional amount thereof, of the issue value, is payable upon
the issuance of the global bonds and will be for the account of the Republic.
ESTATE AND DONOR'S TAXES. The transfer of a global bond by way of
succession upon the death of a non-Philippine holder will be subject to
Philippine estate tax at progressive rates ranging from 5% to 20% if the value
of the net estate of properties located in the Philippines is over P200,000.
The transfer of a global bond by gift to an individual who is related to
the nonresident holder will generally be subject to a Philippine donor's tax at
progressive rates ranging from 2% to 15% if the value of the net gifts of
properties located in the Philippines exceed P100,000 during the relevant
calendar year. Gifts to
S-16
unrelated donees are generally subject to tax at a flat rate of 30%. An
unrelated donee is a person who is not a (i) brother, sister (whether by whole
or half blood), spouse, ancestor, or lineal descendant or (ii) relative by
consanguinity in the collateral line within the fourth degree of relationship.
The foregoing apply even if the holder is a nonresident holder. However,
the Republic will not collect estate and donor's taxes on the transfer of the
global bonds by gift or succession if the deceased at the time of death, or the
donor at the time of donation, was a citizen and resident of a foreign country
that provides certain reciprocal rights to citizens of the Philippines (a
"Reciprocating Jurisdiction"). For these purposes, a Reciprocating Jurisdiction
is a foreign country which at the time of death or donation (i) did not impose a
transfer tax of any character in respect of intangible personal property of
citizens of the Philippines not residing in that foreign country or (ii) allowed
a similar exemption from transfer or death taxes of every character or
description in respect of intangible personal property owned by citizens of the
Philippines not residing in that foreign country.
UNITED STATES TAXATION
The global bonds to be issued pursuant to this offering should form part of
a "qualified reopening," and therefore, part of the issue by the Republic on
July 15, 2003 of 8.25% Global Bonds due 2014 for U.S. federal income tax
purposes.
For a description of certain United States tax aspects of the global bonds,
see "Taxation -- United States Tax Considerations" in the accompanying
prospectus.
S-17
UNDERWRITING
Subject to the terms and conditions contained in an underwriting agreement,
which consists of a terms agreement dated April 27, 2004 and the underwriting
agreement standard terms filed as an exhibit to the registration statement, the
Republic has agreed to sell to the underwriters named below. In the underwriting
agreement, the Republic has agreed to sell to the underwriters, and the
underwriters have agreed to purchase from the Republic, global bonds in the
principal amount of $200,000,000. Each of the underwriters, severally and not
jointly, has agreed to purchase from the Republic, the principal amounts of the
global bonds listed opposite its name below.
<Table>
<Caption>
UNDERWRITERS PRINCIPAL AMOUNT
- ------------ ----------------
Deutsche Bank Securities Inc. .............................. $100,000,000
60 Wall Street
New York, New York 10005
Morgan Stanley & Co. Incorporated........................... $100,000,000
1585 Broadway
New York, New York 10036
------------
Total.................................................. $200,000,000
============
</Table>
The underwriting agreement provides that the underwriters are obligated to
purchase all of the global bonds if any are purchased. The underwriting
agreement also provides that if an underwriter defaults, the purchase commitment
of the non-defaulting underwriters may be increased or the offering of the
global bonds may be terminated.
The Republic has agreed to indemnify the underwriters against liabilities
under the Securities Act of 1933 or contribute to payments which the
underwriters may be required to make in that respect.
The underwriters have agreed to reimburse the Republic for certain
expenses.
COMMISSIONS AND DISCOUNTS
The underwriters have advised the Republic that they propose to offer the
global bonds to the public initially at the public offering price that appears
on the cover page of this prospectus supplement. After the initial public
offering, the underwriters may change the public offering price and any other
selling terms.
In connection with this offering of the global bonds, the underwriters may
engage in overallotment, stabilizing transactions and syndicate covering
transactions in accordance with Regulation M under the Securities Exchange Act
of 1934. Overallotment involves sales in excess of the offering size, which
create a short position for the underwriters. Stabilizing transactions involve
bids to purchase the global bonds in the open market for the purpose of pegging,
fixing or maintaining the price of the global bonds. Syndicate covering
transactions involve purchases of the global bonds in the open market after the
distribution has been completed in order to cover short positions. Stabilizing
transactions and syndicate covering transactions may cause the price of the
global bonds to be higher than it would otherwise be in the absence of those
transactions. If the underwriters engage in stabilizing or syndicate covering
transactions, they may discontinue them at any time. The Republic has been
advised by the representatives that they intend to make a market in the global
bonds, but the representatives are not obligated to do so and may discontinue
any market-making activities at any time without notice. No assurance can be
given as to the liquidity of or the trading market for the global bonds.
In compliance with NASD guidelines the maximum compensation to any
underwriters or agents in connection with the sale of any securities pursuant to
the prospectus and applicable prospectus supplements (including this supplement)
will not exceed 8% of the aggregate total offering price to the public of such
securities as set forth on the cover page of the applicable prospectus
supplement; however, it is anticipated that the maximum compensation paid will
be significantly less than 8%.
S-18
UK SELLING RESTRICTIONS
Each underwriter represents and agrees that it has complied and will comply
with all applicable provisions of the FSMA with respect to anything done by it
in relation to the global bonds in, from or otherwise involving the United
Kingdom.
HONG KONG SELLING RESTRICTIONS
Each underwriter has represented and agreed that it has not issued or had
in its possession for the purposes of issue, and will not issue or have in its
possession for the purpose of issue, any advertisement, invitation or document
relating to the global bonds, whether in Hong Kong or elsewhere, which is
directed at, or the contents of which are likely to be accessed or read by, the
public in Hong Kong (except if permitted to do so under the securities laws of
Hong Kong) other than with respect to global bonds which are or are intended to
be disposed of only to persons outside Hong Kong or only to "professional
investors" within the meaning of the Securities and Futures Ordinance (Cap. 571)
of the laws of Hong Kong and any rules made thereunder.
SINGAPORE SELLING RESTRICTIONS
This prospectus supplement and the prospectus to which it relates have not
been registered as a prospectus with the Monetary Authority of Singapore (the
"MAS") under the Securities and Futures Act, Chapter 289 of the Singapore
statutes (the "Securities and Futures Act"). Accordingly, the global bonds may
not be offered or sold or made the subject of an invitation for subscription or
purchase nor may this prospectus supplement and the prospectus to which it
relates or any other document or material in connection with the offer or sale,
or invitation for subscription or purchase of such global bonds be circulated or
distributed, whether directly or indirectly, to the public or any member of the
public in Singapore other than (1) to an institutional investor or other person
falling within Section 274 of the Securities and Futures Act, (2) to a
sophisticated investor (as defined in Section 275 of the Securities and Futures
Act) and in accordance with the conditions specified in Section 275 of the
Securities and Futures Act or (3) otherwise than pursuant to, and in accordance
with the conditions of, any other applicable provision of the Securities and
Futures Act.
JAPAN SELLING RESTRICTIONS
Each underwriter has acknowledged and agreed that the global bonds have not
been and will not be registered under the Securities and Exchange Law of Japan.
The global bonds (or any beneficial interest therein) may not be transferred by
any holder thereof in Japan to any other person unless such global bonds (or
such beneficial interest) and all other global bonds (or beneficial interests
therein) acquired by such holder are transferred in one lot to a single person,
or to a non-resident of Japan (as defined in the Foreign Trade and Foreign
Exchange Law of Japan) (herein, the "Transfer Restrictions"). Those who acquire
the global bonds (or any beneficial interest therein) (herein, the "Acquirers")
may not solicit 50 or more investors on uniform terms and conditions. The same
obligations are imposed on all subsequent Acquirers (i.e. in case of re-sale,
they must notify the transferee of the Transfer Restrictions and deliver the
document (i) describing the contents of the Transfer Restrictions and (ii)
stating that the global bonds have not been registered under the Securities and
Exchange Law of Japan).
REPUBLIC OF THE PHILIPPINES SELLING RESTRICTIONS
The global bonds constitute exempt securities within the meaning of the
Philippine Securities Regulation Code and as such are not required to be
registered under the provisions of the said Code before they can be sold or
offered for sale or distribution in the Philippines. However, the global bonds
may be sold or offered for sale in the Philippines only by underwriters, dealers
or brokers duly licensed by the Philippine Securities and Exchange Commission.
S-19
NETHERLANDS SELLING RESTRICTIONS
The global bonds may not be offered, sold, transferred or delivered in the
Netherlands as part of their initial distribution or at any time thereafter,
directly or indirectly, other than to banks, brokers, pension funds, insurance
companies, securities firms, investment institutions, central governments, large
international and supranational institutions and other comparable entities,
including, inter alia, treasuries and finance companies of large enterprises
which trade or invest in securities in the conduct of a profession or trade.
Individuals or legal entities who or which do not trade or invest in securities
in the conduct of their profession or trade may not participate in the offering,
and the prospectus supplement and the accompanying prospectus may not be
considered an offer or the prospect of an offer to participate in the offering.
REPUBLIC OF ITALY SELLING RESTRICTIONS
No solicitations in connection with the global bond offering will be made
in Italy by any party, including the underwriters. No copies of this prospectus
supplement, the accompanying prospectus or any other documents relating to the
global bonds or the global bond offering will be distributed in Italy. No global
bonds will be offered, sold or delivered in Italy.
SETTLEMENT AND DELIVERY
The Republic expects that delivery of the global bonds will be made against
payment therefor on or about the closing date specified on the cover page of
this prospectus supplement, which will be the fifth business day following the
date of pricing of the global bonds. Under Rule 15c6-1 of the Exchange Act,
trades in the secondary market generally are required to settle in three
business days, unless the parties to a trade expressly agree otherwise.
Accordingly, purchasers who wish to trade global bonds on the date of pricing or
the next succeeding business day will be required, by virtue of the fact that
the global bonds initially will settle in "T+5", to specify alternative
settlement arrangements to prevent a failed settlement.
RELATIONSHIP OF UNDERWRITERS WITH THE REPUBLIC
The underwriters have in the past and may in the future provide investment
and commercial banking and other related services to the Republic in the
ordinary course of business for which the underwriters and/or their respective
affiliates have received or may receive customary fees and reimbursement of out
of pocket expenses.
S-20
LEGAL MATTERS
The validity of the global bonds will be passed upon on behalf of the
Republic as to Philippine law by the Secretary of the Department of Justice of
the Republic, and as to US federal law and New York State law by Allen & Overy.
Certain matters will be passed upon for the underwriters by Cleary, Gottlieb,
Steen & Hamilton, United States counsel for the underwriters, as to matters of
US federal law and New York State law, and by Romulo, Mabanta, Buenaventura,
Sayoc & de los Angeles, Philippine counsel for the underwriters, as to matters
of Philippine law.
GENERAL INFORMATION
1. The global bonds have been accepted for clearance through The Depository
Trust Corporation, Euroclear and Clearstream, Luxembourg. The Common Code number
is 017264460, the International Securities Identification Number is US718286AU14
and the CUSIP number is 718286AU1.
2. The issue and sale of the global bonds was authorized by the Full Powers
signed by the President of the Republic dated March 26, 2004.
3. Except as disclosed in this prospectus supplement and the accompanying
prospectus, there has been no material adverse change in the fiscal condition or
affairs of the Republic which is material in the context of the issue of the
global bonds since April 15, 2004.
4. Application has been made to list the global bonds on the Luxembourg
Stock Exchange. Copies of the following documents will, so long as any global
bonds are listed on the Luxembourg Stock Exchange, be available for inspection
during usual business hours at the specified office of Deutsche Bank Luxembourg
S.A. in Luxembourg:
- copies of the Registration Statement, which includes the fiscal agency
agreement, the supplement to the fiscal agency agreement and the form of
the underwriting agreement as exhibits thereto; and
- the Full Powers signed by the President of the Republic dated March 26,
2004 and the resolution of the Monetary Board of Bangko Sentral adopted
on April 26, 2004, authorizing the issue and sale of the global bonds.
In addition, so long as the global bonds are outstanding or listed on the
Luxembourg Stock Exchange, copies of the Philippines' economic reports for each
year in English (as and when available) will be available at the offices of the
listing agent in Luxembourg during normal business hours on any weekday. The
underwriting agreement, the fiscal agency agreement and the supplement to the
fiscal agency agreement shall also be available free of charge at the office of
the listing agent and the Luxembourg paying and transfer agent.
5. Deutsche Bank Luxembourg, S.A. has been appointed as the Luxembourg
paying agent. For so long as the global bonds are listed on the Luxembourg Stock
Exchange and the rules of the Luxembourg Stock Exchange so require, the Republic
will maintain a paying agent and a transfer agent in Luxembourg.
S-21
ISSUER
REPUBLIC OF THE PHILIPPINES
Department of Finance
Office of the Secretary
Department of Finance Building
BSP Complex
Manila
Republic of the Philippines
<Table>
FISCAL AGENT, PRINCIPAL PAYING LISTING, PAYING AND
AGENT, TRANSFER AGENT
TRANSFER AGENT AND REGISTRAR
JPMORGAN CHASE BANK DEUTSCHE BANK LUXEMBOURG S.A.
4 New York Plaza 2 Boulevard Konrad Adenauer
15th Floor L-1115 Luxembourg
New York, New York 10004
United States of America
LEGAL ADVISORS TO THE ISSUER LEGAL ADVISORS TO THE UNDERWRITERS
as to US law as to US law
ALLEN & OVERY CLEARY, GOTTLIEB, STEEN & HAMILTON
9th Floor, Three Exchange Square Bank of China Tower
Central One Garden Road
Hong Kong SAR Hong Kong SAR
as to Philippine law as to Philippine law
DEPARTMENT OF JUSTICE ROMULO, MABANTA, BUENAVENTURA
Padre Faura Street SAYOC & DE LOS ANGELES
Malate 30th Floor, Citibank Tower
Manila 8741 Paseo De Roxas
Republic of the Philippines Makati City
Republic of the Philippines
</Table>
[REPUBLIC OF THE PHILIPPINES LOGO]
UNTIL JUNE 6, 2004, ALL DEALERS THAT EFFECT TRANSACTIONS IN THE GLOBAL BONDS,
WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.