The Market Monitor Minding the Nation's Business
By Riza Lozada
Corporate borrowings have surged last year to reflect the healthy state of the economy as private bonds registered with the Securities and Exchange Commission (SEC) surged 134 percent in 2016.
Aside from the robust economy, the SEC also cited its enhanced shelf registration program for the upswing in corporate bonds application.
Private companies registered with the securities regulator around P280 billion in fixed rate and deferred coupon paying bonds and commercial papers last year from P120 billion in 2015.
SEC said the guidelines for the shelf registration program was enhanced under the 2015 Securities Regulation Code (SRC) implementing rules and regulations.
SEC data showed that out the P280 billion registered bonds and commercial papers, around P236 billion or 84 percent of these debt instruments were registered through the enhanced shelf-registration system.
Under the shelf registration program, securities may be registered for an offering to be made on a continuous or delayed basis, or in tranches, for a period not exceeding three years.
Capital raising can be done by issuers as they are needed and/or when market conditions are favorable for them.
The SEC also provided flexibility in the payment of registration fees. The fees are now payable per tranche of issuance and proportional to the issued value.
Corporate bond issuers last year were Ayala Land Inc., DMCI Project Developers Inc., Ayala Corp, SM Prime Holdings Inc., Petron Corp, SM Investment Corp., Arthaland Corp, Double Dragon Properties Inc., and SMC Global Power Holdings Corp.
Commercial paper issuers include Cityland Inc., Cityland Development Corp., City & Land Developers Inc., BDO Leasing and Finance Inc., and SL Agritech Corporation.