SEC approves PCI Leasing’s P1.25-B STCP issue

The Securities and Exchange Commission has approved PCI Leasing & Finance Inc.’s (PCILF) proposed issuance of P1.25 billion worth of short-term commercial papers.

PCILF, 85 percent owned by Equitable PCI Bank, provides leasing and financing products to commercial clients.

Proceeds from the offering will be used for relending activities (P1 billion) and payment of maturing obligations (P250 million).

The company has loans maturing on June 29, 2007 amounting to P25 million; another P25 million on Aug. 31; 2007, P160 million on Oct. 29; and P40 million on Nov. 30.

The issue was assigned a rating of PRS1 by local credit rating agency Philratings. The rating is defined as "strongest capability for timely payment of debt instrument issue on both interest and principal."

Philratings said it considered the consistent growth in revenues and earnings complemented by a build-up in capital and assets that have placed PCILF in a position of dominance in the leasing and finance industry where it ranked first in total assets, in total loans and lease portfolio, in gross revenues and net income as for the year ended 2005.

Philratings said the growth in PCILF’s loans portfolio is the basis for the strong industry standing supported by efficiency in the fast processing of new business, a responsive marketing organization and a well-executed marketing complementation and strategic synergy with parent company EPCIB.

Philratings also considered the diversified nature of PCILF’s receivables portfolio; the more than adequate amount of collections to cover maturing payables; the decline in value of the repossessed assets and non-performing assets; and the adequate loan loss reserves, all of which favorably characterize the quality of PCILF’s assets.

The company’s access to credit lines with various financial institutions also provides PCILF flexibility in sourcing funds, Philratings said.

Last year, PCILF posted a net income of P394 million or an increase of seven percent on revenues of P1.1 billion. Finance and leasing portfolio reached P8.4 billion, up from P7.6 billion in 2004.