BDO Leasing bares plan to issue P15b worth of CP

BDO Leasing and Finance Inc. plans to raise up to P15 billion from the issuance of commercial paper. 

BDO Leasing said in a filing with the Securities and Exchange Commission it was issuing P15 billion worth of CP to finance maturing obligations and relend part of the proceeds.

The company  tapped BDO Capital and Investments Corp. as the exclusive selling agent for the CP.

BDO Leasing as of end August this year had P8.8 billion worth of maturing CPs and P5.4 billion in maturing promissory notes.

BDO Leasing is the leasing and financing unit of BDO Unibank Inc., which provides  customers direct leases, real estate leases, sale and leaseback arrangements as well as receivables factoring. 

It also provides operating leases through its wholly-owned subsidiary BDO Rental Inc. 

BDO Leasing is among the industry’s dominant players in terms of total assets, capitalization and profitability. 

BDO Leasing posted a net income of P178 million in the first half of the year, down 36.8 percent from P282 million year-on-year, due to higher funding and operating costs.

Gross revenues rose four percent year-on-year on steady interest income from its lease and finance portfolio of P34 billion, augmented by service fees and other income. The revenues, however, were negated by higher financing charges and lower interest margins, as well as increased documentary stamp tax on its commercial paper issue following the implementation of the TRAIN law early this year.

Amid a challenging operating environment, the company will continue to strengthen its marketing efforts in emerging provincial areas while leveraging on the parent company’s broad market reach to extend leasing and financing services to the growth sectors of the economy. 

The company also plans to expand and optimize funding sources to match its asset growth and manage funding costs.

Share price of BDO Leasing on Friday closed at P2.50, up P0.10 from the previous previous day.

Topics: BDO Leasing and Finance Inc. , commercial paper
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