Bonds to mark 2015 another ‘record year’

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2014 listings more than double to P190B – PDEX

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The Philippine fixed-income market marked 2014 a record year, with new bond listings more than doubling in volume to a high of P190 billion.

The head of the Philippine Dealings and Exchange Corp. (PDEX) said he sees another landmark year in 2015, expecting to witness “listing after listing” from the issuer community.

Cesar Crisol, PDEX chairman and chief executive officer, told The Manila Times that many of the companies that issued the bonds used the proceeds to fund the expansion of their operations.

“Last year was about P190 billion. It was a record year. There were new issues and a lot of the issuers were using the funds for their expansion,” Crisol said on Monday following BDO Unibank Inc.’s maiden listing of P7.5-billion long-term negotiable certificates of deposits (LTNCD).

“As we open the second quarter of this year with BDO’s P7.5-billion LTNCDs, we remain optimistic that 2015 will also be a landmark year for our issuer sector. We look forward to the vibrancy of this market as we witness once again listing after listing from our issuer community,” he added.

In 2014, the volume of new bond listings reflected a big jump from P83 billion listed in 2013.

“It is basically for infrastructure projects, power projects, as well as real estate developments,” Crisol said.

In the first half of 2014, the PDEX raised P20.99 billion from three debt issuers, consisting of P7.5 billion from Banco de Oro (BDO), P1.49 billion from Phoenix Petroleum Philippines Inc. and P12 billion from Robinsons Land Corp.

“[For this year,] we will try if we can at least come to par with last year’s P190 billion. We’re hoping we could still hit that level. If not in the number of issuers, at least the amount,” Crisol said.

“We’re confident that as we move toward the second half of the year there’ll be more issuers, considering various infrastructure projects are getting realized. And the global indication and the interest rates are moving here, so issuers would probably want to take advantage of the good market,” he added.

PDEX’s inventory of outstanding listings so far consists of 91 securities, amounting to P486 billion, as issued by 32 companies.

Crisol said companies that plan to issue bonds this year are likely to be those engaged in infrastructure development, energy and power generation, real estate and services.

Raising funds from corporate debt notes remains attractive to companies listed on the Philippine Stock Exchange, which gives alternative funding for firms other than bank loans.

Bond issues also provide companies access to a wider array of investors, whether local or foreign, institutional or retail.

“Also, companies would be able to maximize [the benefits that they get from]market rates, considering that the debt market is now profitable. They are taking advantage of low interest rates at present,” Crisol said.

The PDS Group is a capital market solution designed to link market activities from trading, clearing and settlement to post-settlement disposition. It is composed of a holding company, the Philippine Dealing Systems Holdings Corp., and operating subsidiaries, namely the PDEx, the Philippine Depository & Trust Corp. (PDTC), the Philippine Securities Settlement Corp. (PSSC), and the PDS Academy for Market Development Corp. (PDSA).

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