Corporate bonds this year expected to hover around 2017’s record level
THE Philippine Dealing and Exchange Corp. (PDEx) expects new corporate bond listings to match last year’s record level.
The volume of fresh corporate debt listed in 2017 totaled P207.43 billion, the highest level of new corporate bond listings since the public market opened in 2008 and surpassing the level of new listings in 2016 by 23%, according to data from the PDS Group.
“Hopefully, we can match last year’s level,” PDS President and CEO Cesar B. Crisol said in an interview, noting that there are six applications in the pipeline.
Demand for these securities will be driven by robust liquidity in the financial market, Mr. Crisol added.
First Metro Investment Corp. sees corporate bond floats to hit P212 billion this year, buoyed by the positive outlook for the domestic economy.
SM Prime Holdings, Inc. announced last week that it is raising up to P20 billion from the sale of long-term bonds to retail investors — the third tranche of its P60-billion shelf registration of fixed rate bonds approved by the Securities and Exchange Commission in 2016.
“Maliit na lang ang balance ng shelf registration because they issued more last year. We hope to see more applications for shelf registration,” Mr. Crisol said.
Companies can use the shelf registration program to raise funds as they are needed or when market conditions become favorable to them.
“The capital market is very active on the debt side and on the equity side,” Virgilio O. Chua, first vice- president and investment banking group head at China Banking Corp., said in a separate interview.
“There are a lot of issues that were postponed last year. Hopefully, we’ll see them come to fruition this year.”
Two of the country’s biggest banks — Metropolitan Bank & Trust Co. and Bank of the Philippine Islands — are leading the way in raising from capital through the Philippine stock market, with plans to raise as much as P110 billion from the sale of shares to existing investors.
“The increase in economic activity obviously requires funding and that’s where the bank comes in,” Mr. Chua said.