PSE Circular for Brokers No. 2566-99

October 11, 1999 PSE CIRCULAR FOR BROKERS NO. 2566-99 SECURITIES AND EXCHANGE COMMISSION SEC FORM 11-C CURRENT REPORT UNDER SECTION 11 OF THE REVISED SECURITIES ACT (RSA) AND RSA RULE 11(a)-l(b)(3) THEREUNDER 1. 8 October, 1999 Date of Report (Date of earliest event reported) 2. SEC Identification Number PW 55 3. BIR Tax Identification No. 000-487-793 4. Philippine Long Distance Company Exact name of registrant as specified in its charter 5. Philippine Province, country or other jurisdiction of incorporation 6. (SEC Use Only) Industry Classification Code 7. Makati Avenue, Makati City, Philippines Address of principal office 8. (632) 816-8714 Registrant's telephone number, including area code 9. Not applicable Former name or former address, if change since last report 10. Securities registered pursuant to Sections 4 and 8 of the RSA Number of Shares of Common Stock Title of Each Class Outstanding and Amount of Debt Outstanding 11. Indicate the item numbers reported herein: Item 9 Item 9 In compliance with the disclosure requirements of the Securities and Exchange Commission, we disclose that Philippine Long Distance Telephone Company ("PLDT"), its subsidiary Pilipino Telephone Corporation ("Piltel") and the bank creditors of Piltel have signed today a Memorandum of Understanding ("MOU") which sets out the principal terms that will provide the framework for the formalization of Piltel's debt restructuring. The MOU contains the following indicative terms: 50 percent of the bank debt will be replaced by peso-denominated Piltel convertible preferred stock exchangeable for PLDT convertible preferred stock. The PLDT convertible preferred stock may be converted at the option of the holder at any time from the issue date up to the seventh anniversary of the issue date into PLDT common shares. The conversion price shall be the higher of P1,700 per share or 50 percent above the average market price of PLDT common shares over a period of 20 consecutive trading days before the restructuring date, subject to a maximum of P1,850 per share. 25 percent of the bank debt will be replaced by a 10-year term loan with a bullet payment at maturity. Interest of peso-denominated debt shall be 91-day T-bill rate plus 1 percent per annum while US$-denominated debt shall be at 3-month LIBOR plus 1 percent per annum. 25 percent of the bank debt will be replaced by an amortizing 15-year term loan. Interest shall be set at the same rates as those of the 10-year loan. cdlex Under the MOU, it is envisaged that PLDT may have to provide a letter of support in connection with the debt restructuring of Piltel wherein PLDT will agree (a) to obtain any consents and waivers required of PLDT, to integrate the operations of the current businesses of Smart Communications Inc., Piltel and PLDT, (b) to obtain any consents and approvals necessary to provide further funding to Piltel as Piltel may require in the event that cash flow from operations of Piltel falls short of amounts required by Piltel to discharge in full its obligations to creditor banks outstanding on implementation in full of Piltel's debt restructuring. and (c) not to dispose of any shares carrying voting rights in Piltel if such disposal would result in PLDT's aggregate voting interest falling to less than a certain agreed percentage until such time as Piltel has discharged in full its obligations to creditor banks outstanding on implementation of the Piltel debt restructuring. SIGNATURE Pursuant to the requirements of the Revised Securities Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PHILIPPINE LONG DISTANCE TELEPHONE COMPANY By: (SGD.) MA. LOURDES C. RAUSA-CHAN Corporate Secretary