The Securities and Exchange Commission (SEC) has approved the plan of BDO Leasing & Finance Inc., the leasing unit of financial services firm Banco De Oro, to issue short-term commercial papers (STCPs) amounting to P4 billion.
Documents filed with the SEC show that proceeds from the issue will be used to pay down maturing obligations and boost relending activities.
The company has P1.66 billion worth of maturing debts. Among its creditor-banks include BDO, Philippine National Bank, United Coconut Planters Bank, Bank of the Philippine Islands, Land Bank of the Philippines and Standard Chartered Bank.
The STCP issue was assigned a PRS 2 Plus rating by domestic credit rating agency Philippine Rating Services Corp. The rating means BDO Leasing has an above average (strong) capability for payment of the commercial paper issue on both interest and principal.
The PRS 2 Plus rating, which is the second highest rating level on Philratings short-term credit rating scale, reflects BDO Leasing’s solid market position, sound capitalization, synergies with its parent firm BDO and sustained although tempered profitability, Philratings said.
BDO Leasing remains a major player in the domestic leasing and financing industry. Its capitalization is sound, supported by the company’s large equity base and conservative leverage.
The leasing firm’s P4-billion equity as of end-2007 is considered as the biggest in the industry. Debt usage is expected to remain prudent, with projected debt-to-equity ratio seen to be nearly unchanged from that of the previous years.
– Zinnia B. Dela Peña
Last year, BDO Leasing posted a net income of P341.65 million, up 7.1 percent from P318.92 million in 2006. Revenues amounted to P1.15 billion or an increase of 12.7 percent from the previous level.
BDO Leasing became a subsidiary of BDO Unibank when BDO and Equitable PCIBank entered into a merger effective May 31, 2007 with BDO as the surviving entity. – Zinnia B. Dela Peña