PSE Circular for Brokers No. 1216-98

June 2, 1998 PSE CIRCULAR FOR BROKERS NO. 1216-98 June 1, 1998 The Philippine Stock Exchange 4/F PSE Center, Exchange Road Ortigas Center, Pasig City Gentlemen : We refer to your facsimile message dated May 29, 1998 asking for a written confirmation or clarification of a news article which came out in the Business World regarding the "FPHC flotation" of convertible notes outside of the Philippines. We wish to confirm the fact that First Philippine Holdings Corporation intends to privately place convertible notes in the principal amount of US$90 million. However, the Company is still negotiating the terms and conditions with prospective investors and at this point, the Company can only disclose what it has stated in its application with the Securities and Exchange Commission for an exemption from registration. We attach a copy of the letter to the Securities and Exchange Commission. The Company will make the necessary disclosures when the terms and conditions of the convertible notes have firmed up. Very truly yours, (SGD.) ENRIQUE I. QUIASON Corporate Secretary May 26, 1998 The Securities and Exchange Commission SEC Building E. de los Santos Ave. Mandaluyong City Gentlemen : FIRST PHILIPPINE HOLDINGS CORPORATION On June 17, 1997, the SEC Money Market Operations Department issued Resolution No. 09 Series of 1997 (The "Resolution") granting First Philippine Holdings Corporation's (the "Company") petition for exemption from registration under the Revised Securities Act of (i) the guarantee of the Company of up to US$200,000,000 Euroconvertible Notes ("Euroconvertible Notes") to be issued outside the Philippines by a corporation organized in the Cayman Islands and (ii) the underlying common shares which the subject-corporation intends to reserve for future conversion of the Notes. Exemption fees in the aggregate amount of P5,592,860.90 was paid to the SEC. We attach a copy of the Resolution for your easy reference. The Company decided to defer the issuance of such guarantee of the Euroconvertible Notes and the reservation of the underlying common shares because of volatile financial market conditions during the last half of 1997. Up to this date, the Company has neither issued any such guarantee for the Euroconvertible Notes nor shares in connection with the conversion of such Euroconvertible Notes. Recently however, general stability in the financial markets has provided the Company with an opportunity to raise capital through the private placement of a similar convertible instrument of up to US$90,000,000.00 to less than five investors. Similar to the Euroconvertible Notes referred to in the Resolution, the Company proposes to guarantee unconditionally and irrevocably the full payment of all sums due under the such notes which notes will be issued outside the Philippines by a corporation organized in the Cayman Islands wholly-owned by the Company. The proceeds of the private placement of the notes will be delivered by the special purpose vehicle to the Company and booked by the Company as an advance or as a deposit on future subscription. The notes will give the holder thereof the option to convert such note into fully paid Class "A" shares or Class "B" shares of the Company at a conversion price to be fixed on issue date with a fixed currency exchange rate upon conversion. Should a note holder decide to convert, the Company will issue the underlying shares. No commission or remuneration will be paid or given directly or indirectly for soliciting any conversion of the Notes. In view of the foregoing, we request that (i) the issuance of the guarantee by the Company of up to US$90,000,000.00 convertible notes to be privately placed outside the Philippines by a wholly-owned subsidiary organized under the laws of the Cayman Islands and (ii) the underlying common shares which the Company intends to reserve for future conversion of the notes be covered by the same exemption from registration under the Resolution. Very truly yours, (SGD.) ENRIQUE I. QUIASON IN THE MATTER OF THE FIRST PHILIPPINE HOLDINGS CORPORATE (FPHC) RESOLUTION This is a petition filed on behalf of FIRST PHILIPPINE HOLDINGS CORPORATION requesting that (i) the issuance of the guarantee by FPHC of up to US$200,000,000 Euroconvertible Notes ("Notes") to be issued outside the Philippines by a corporation organized in the Cayman Islands, and (ii) the underlying common shares which the subject-corporation intends to reserve for future conversions of the "Notes" be exempted from the registration requirements of the Revised Securities Act, Batas Pambansa Blg. 178. FIRST PHILIPPINE HOLDINGS CORPORATION was incorporated on June 30, 1961 and established primarily as a holding company concentrating its investments in energy, transport infrastructure, and property development. In view of the fact that the securities sought to be exempted shall be issued outside the Philippines the Commission is of the opinion and so resolves that such securities are exempt from the requirements of registration of Section 4(a) of the Revised Securities Act. Petition is therefore GRANTED . Exemption fee in the aggregate amount of P5,592,860.90 had been paid to the Commission, to wit: Official Receipt No. Date Paid Amount 1093083 04.30.97 P5,326,538.00 1093083 04.30.97 266,322.90 IT IS SO RESOLVED. EDSA, Mandaluyong City, Philippines, June 17, 1997. (SGD.) LINDA A. DAOANG Acting Director Money Market Operations Department