Bond listings could set new record this year

BOND LISTINGS at the fixed-income exchange could hit a record P300 billion by yearend, fueled by relaxed rules for bank bond issuance implemented last year as well as attractive interest rates.

“We may have a chance to probably reach around P300 billion. Right now we’re at a record because we had P256 (billion) last year,” Philippine Dealing and Exchange Corp. (PDEx) President and Chief Operating Officer Antonino A. Nakpil told reporters during the listing ceremony for Ayala Land, Inc. (ALI)’s P3-billion fixed-rate bonds last week.

Outstanding bonds at the PDEx for the year have so far reached P260.2 billion after ALI’s listing on Monday, already surpassing 2018’s full-year P256.4 billion.

Mr. Nakpil said PDEx expected six to eight more bond offers after ALI, including San Miguel Corp.’s P10-billion listing on Friday, with banks seen to dominate fourth-quarter issuances.

“It’s not totally unexpected given that we were really expecting the banks to come in with the bank bond issuance program. That was something we were really expecting to see… The regulations they released, they’re very incentivizing for the banks to do that,” Mr. Nakpil explained referring to Circular No. 1010 issued by the Bangko Sentral ng Pilipinas (BSP) in August last year, which simplified the process for universal and commercial banks as well as quasi-banks looking to raise funds through bonds.

Under the rule, big banks need only submit a certification of compliance and supporting documents to the BSP within five banking days after their board of directors approve the bond issuance. Banks will still have to comply with existing rules of the Securities and Exchange Commission, such as enrolling the debt instruments in an SEC-supervised market.

Banks have so far raised some P193 billion in fresh capital from bond issuances at the PDEx this year. The funds include P48.82 billion from BDO Unibank, Inc.; P30 billion from China Bank Corp. and P28.75 billion from Metropolitan Bank & Trust Co., according to data on the PDEx website.

Other bank issuers include Philippine National Bank (PNB), Rizal Commercial Banking Corp., Philippine Savings Bank, Robinsons Bank, Security Bank Corp. and Union Bank of the Philippines, Inc.

“Conducive din ’yung interest levels for the corporates to be coming in, they’re mixing it up with the bank issuance,” Mr. Nakpil added.

The central bank has reduced benchmark interest rates by a total of 75 basis points (bps) so far this year to four percent, 3.5% and 4.5% for overnight reverse repurchase, as well as overnight deposit and lending, respectively, in the face of slowing inflation and the need to spur economic growth.

Companies that have disclosed their intent to raise more bonds through the PDEx in the fourth quarter include PNB at P20 billion and ALI at P10 billion. — Arra B. Francia