SEC shelf registration program boosts bond issues in 2016

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CORPORATE bonds registered with the Securities and Exchange Commission more than doubled in 2016 over the previous year as the SEC’s enhanced shelf registration program encouraged more companies to tap the bond market for their fundraising needs.

In a statement over the weekend, the SEC said P280 billion worth of fixed-rate and deferred coupon paying bonds and commercial papers were registered last year, 134 percent higher than the P120 billion worth of debt paper registered in 2015.

The SEC said the significant boost was due to its shelf registration program under the 2015 Securities Regulation Code Implementing Rules and Regulations (2015 SRC-IRR).

Of the P280 billion bonds registered last year, only about P143 billion were issued. This is because under the shelf registration program, companies may register debt securities with the SEC for issuance within three years.


“The data show that out the P280 billion registered bonds and commercial papers, around P236 billion or 84 percent of these debt instruments were registered through the enhanced shelf-registration system,” the corporate regulator said.

“Capital-raising can be done by issuers as they are needed and/or when market conditions are favorable for them,” the SEC said.

The program also provides companies the flexibility in the payment of registration fees, which are now payable per tranche of issue and proportional to the issued value.

Last year’s corporate issuers under the program include: Ayala Land Inc. (P50 billion), DMCI Project Developers Inc. (P1 billion), Ayala Corp. (P20 billion), SM Prime Holdings Inc. (P60 billion), Petron Corp. (P40 billion), SM Investment Corp. (P50 billion), Arthaland Corp. (P3 billion), DoubleDragon Properties Inc. (P15 billion), and SMC Global Power Holdings Corp. (P15 billion).

The 2015 SRC-IRR also provided an improved definition of commercial paper—now defined as “evidence of indebtedness of any person with a maturity of three hundred and sixty-five (365) days or less.”

The new rules ceased using the terms of “long term commercial paper” and “short term commercial paper”. Selling commercial papers was also made easier with the requirement of an issuer rating instead of a separate rating for each issuance.

Issuers of commercial papers include Cityland Inc. (P690 million), Cityland Development Corp. (P1.3 billion), City & Land Developers Inc. (P300 million), BDO Leasing and Finance Inc. (P25 billion), and SL Agritech Corp. (P1 billion).

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