China Bank to underwrite Monark’s P4-B notes issue

MANILA, Philippines - China Banking Corp. has been tapped to underwrite the P4-billion corporate notes of Monark Equipment Corp., the sole authorized dealer for the heavy equipment and power systems products of Caterpillar, a world leader in construction equipment.

This will mark the first time Monark will tap the capital market to pay up debts and support its business expansion.

Specifically, proceeds from the five-year notes issuance will be used mainly to refinance existing long-term debts, with the balance for general corporate purposes.

“We are pleased that our maiden issue got a strong vote of confidence from the financial community. This marks another milestone in 2013 as we celebrate Monark’s 26th year. We are grateful to China Bank for arranging this successful corporate notes issuance, establishing Monark’s ability to raise long-term financing from the debt capital markets. The support from both the financial market and our major asset – our people – gives us greater initiative to move forward and to continue to be a driving force to support key industries,” said Monark chairman Jose Antonio Banson.

Corporate notes are a quicker fund-raising option for top-tier corporations as they are sold to institutional investors unlike retail bonds, which are sold through a public offering and go through a more tedious regulatory approval process.

The noteholders of the Monark corporate notes are China Bank, Bank of the Philippine Islands and United Coconut Planters Bank. China Bank Trust Group is the facility agent, registrar and paying agent.

“We are happy to support companies like Monark that are committed to nation-building,” China Bank SEVP and chief operating officer Ricardo Chua said.

“We appreciate their trust and confidence in us as we continue to pave the way to open the capital markets for first time issuers like Monark, enabling them to diversify their funding base.”

Established in 1962 as Monark International Inc., the group initially catered to the forest industry, then moved into equipment rentals and the earthmoving contracting field areas in the 1980s where it developed unmatched capability and track record. In 1987, the group bid and won the CAT dealership in the Philippines.