AEON Credit Service (Philippines), Inc. said it raised P1 billion from an issue of fixed-rate notes, with the proceeds intended to support the company’s operations.
At the listing ceremony on Friday at the Philippine Dealing and Exchange Corp. (PDEx) in Makati City on Friday, the consumer finance firm enrolled P1 billion worth of peso-denominated paper with tenors of three and five years.
AEON Philippines listed P900 million in notes, which carry an interest rate of 7.299% to be paid semi-annually until 2021.
The remaining P100 million in notes was priced at 7.695%, paid out twice a year until 2023.
The fixed-rate paper carry guarantees from the Credit Guarantee and Investment Facility, a trust fund of the Asian Development Bank.
The lending company’s notes are the first in the country under the ASEAN+3 Multi-Currency Bond Issuance Framework, which allows companies to issue local-currency bonds in multiple countries within the region.
In an interview, AEON Philippines President and Chief Executive Officer Takayuki Araki said the additional capital raised will be used to match the duration of its liabilities and receivables and fund its loan programs.
“The tenor of our receivables is getting longer and longer. We have been actually seeking for the longer tenor to avoid the mismatching of the duration of our liabilities and receivables,” Mr. Araki told BusinessWorld on the sidelines of the listing ceremony.
“That’s why this time we have [issued] this type of note which tenors are three and five years, which exactly matches our receivables.”
In his speech, Mr. Araki added that funds raised will be used to “primarily fund the operations of its tricycle and four-wheeler loans.”
Established in the Philippines in 2013, AEON Philippines, a subsidiary of AEON Financial Service Co., Ltd. in Japan, started offering installment loans for the purchase of consumer products such as home appliances, furniture and electronic goods, focusing on unbanked and underserved clients.
The firm then ventured into tricycle and four-wheel vehicle loans “in support of the Philippine government’s goal of financial inclusion.”
AEON Philippines tapped Metropolitan Bank & Trust Co. as the market maker for its notes program, while First Meto Investment Corp. served as arranger and underwriter.
Mizuho Securities Asia Ltd. acted as the firm’s financial adviser.
The notes listing brings the total volume of outstanding securities at the PDEx to P977.27 billion, floated by 50 companies. — Karl Angelo N. Vidal