A NUMBER of conglomerates are taking advantage of the low interest rates in the country and registered rate bond P137 worth of corporate bonds with the state-run capital market regulator, the Securities and Exchange Commission (SEC) in the first half of this year.
The bulk or 88 percent of them amounting to P121 billion, were registered under its “shelf registration system” for offering on a continuous or delayed basis over a period not exceeding three years SEC said in a statement.
It means the corporate issuers can time their capital raising activities, as they are needed or when market conditions favor them.
Out of the P137 billion registered in the first six months, P52 billion has already been issued. Besides, P36 billion has been issued under shelf registration.
The SEC said the increase in corporate bond issuances in the first half of the year was mostly caused by conglomerates registering under the shelf registration program. They included: Ayala Land (P50-billion fixed rate bonds), DMCI Project Developers (P1-billion deferred coupon paying home saver bond), Ayala Corp. (P20-billion fixed rate bonds), and SM Prime Holdings (P50-billion fixed rate bonds).
Aside from these four, SMC Global Power Holdings Corp. registered P15-billion worth of fixed rate bonds, and SL Agritech Corp. registered P1-billion worth of short-term commercial papers.
Under the shelf registration program, companies can pay the registration fees as they issue bonds and commercial papers in tranche of issuance.
The SEC has been active in promoting efficiency-related measures such as the shelf registration program, which is seen as a step in improving the quality of business regulation in line with the Duterte administration’s 10-point socio-economic agenda for enhancing business competitiveness.