Bond listing at Philippine Dealing & Exchange Corp. is expected to reach P300 billion by the end of June as more companies plan to tap the debt market to fund expansion plans and projects, a top executive said.
PDEX president and chief executive Antonino Nakpil said during the recent listing ceremony of Ayala Land Inc.’s P12-billion bonds that bond listing so far reached P216.45 billion. The figure already exceeded the P213.45 billion in total corporate bond listings in 2021.
“This year is officially better than last year, and the pipeline of reservations indicate that our regular returnee issuers are flexing and showing their prowess in debt capital raising, suggesting a level of P300 billion may be reached by June of 2022,” Nakpil said.
Many companies are tapping the local bond market ahead of the expected rate increase and to diversify funding sources.
The Bangko Sentra ng Pilipinas hinted that it may study adjusting the interest rates by June this year, after keeping the cost of borrowing at record low for almost two years. The overnight borrowing rate stays at 2 percent, which keeps the 91-day Treasury bill rates and bank lending rates steady.
Nakpil said demand for debt capital was strong as all 11 corporate bond listings this year were oversubscribed by an average of 3.2 times their original amounts. Most of the bond subscribers were also domestic investors.
The largest bond listing so far this year was the P52.7-billion Asean sustainability bonds issued by BDO Unibank Inc., the country’s largest lender,
BDO set a new record as the largest bond issuance by a local bank in the domestic debt market in a single tranche. The previous record of P40.1 Billion was coincidentally also held by BDO.
Other top bond offerings this year were SM Prime Holdings Inc. (P30 billion), San Miguel Corp. (P30 billion), Bank of the Philippine Islands (P27 billion), SM Investments Corp. (P15 billion), Rizal Commercial Banking Corp. (P 14.75 billion), Converge Information and Communications Technology Solutions Inc. (P10 billion), Aboitiz Power Corp. (P10 billion), Ayala Land (P12 billion) and Century Properties Group Inc. (P3 billion).
PDEX recorded a record P388 billion worth of debt paper listings in 2020. This may be exceeded by bond issuances this year, once the P300-billion mark was achieved in the first half.
Debt issuances are used by companies to support expansion, which in turn create more jobs and boost production.