THE Philippine Dealing & Exchange Corp. (PDEx) said it maintained its 2020 bond listing target at P350 billion while digitizing the documentation process for bond issues.
PDEx President and Chief Operating Officer Antonino A. Nakpil, asked about the exchange’s target for next year, told BusinessWorld on the sidelines of the listing ceremony for BPI Family Bank’s maiden bond issue last week: “The same level, at least…. P350 billion again for next year.”
In his speech at the ceremony, Mr. Nakpil said that bond listings in the year to date have hit P363.3 billion, up 41.7% from the P256.4 billion for all of 2018.
“For banks really there’s an economic push for them. With regard to the reserve requirements (for bonds)… the regulation of the Bangko Sentral (ng Pilipinas) is very conducive,” he told BusinessWorld.
The bank’s president Maria Cristina L. Go also told BusinessWorld that the central bank’s decision to decrease the reserve requirement for bonds to 3% has also been factored into the bank’s maiden bond issue.
“We’ve been planning to really go to the capital markets maybe as early as the middle of the year. We got approval from the board to issue bonds, because there was a lowering of the reserve requirements for bonds to 3%. So in October, we got approval,” she told BusinessWorld on the sidelines of the listing ceremony.
The bond tenor is 2.5 years with a 4.3% coupon payable quarterly.
Aside from BPI Family, Asia United Bank also listed its maiden bond issue in November that raised a total of P7 billion, after the initial plan to raise P3 billion was oversubscribed.
In October the BSP decided to slash the reserve requirement for bonds issued by banks and quasi banks (QBs) by 300 basis points from its then level of 6%. The central bank said that the move was expected to reduce bond issuers’ intermediation cost, savings which could then be passed on to holders of such securities.
Mr. Nakpil said the digitization process is under study.
“We’re also exploring means to digitalize issuer transactions with PDEx across the areas of listing, trading and disclosure activities,” he said in his speech.
He noted that major developments this year on the registry front include “fully electronic applications and submissions from the selling agent to the registry” for bank bond issues.
“We look forward to establishing fully paperless transactions as the norm in the primary market activity,” he said. — Luz Wendy T. Noble
