Corporate bond issues up10% in 2013 – ADB

MANILA, Philippines - Philippine companies are actively tapping the country’s bond market, accounting for 93.4 percent of total local currency (LCY) corporate bond issues last year, the Asian Development Bank (ADB) said in a report.

A total of 52 companies issued P591.5 billion in corporate bonds while the National Government issued P3.889 billion in government securities.

According to the ADB, the LCY bond market grew at a robust annual rate of 10.2 percent last year.

“Local firms took advantage of relatively low interest rates before the end of the year, in anticipation of higher rates in 2014 as a result of the US Federal Reserve tapering of its QE program and rising inflation concerns,” the ADB’s Asian Bond Monitor report said.

Ayala Land Inc. was the largest corporate issuer with P49.9 billion followed by San Miguel Brewery with P45.9 billion and Ayala Corp. with P40-billion outstanding bonds.

In the fourth quarter, 12 companies issued bonds, long-term negotiable certificates of deposits (LTNCDs) and Tier 2 notes. Manila Electric Co. (Meralco) was the largest issuer, raising P18.5 billion worth of bonds, followed by state-run Development Bank of the Philippines (DBP) with P10 billion of Tier 2 notes, and Aboitiz Equity Ventures with P8 billion worth of corporate bonds.

Banks and other financial institutions remained the leading issuer of debt in the fourth quarter, with 25.5 percent of total, to meet the stringent global requirements on liquidity and capital.

Meanwhile, leading instruments of government issues were Treasury Bills (T-bills), Treasury Bonds (T-bonds) and others. T-bonds amounted to P3.4 trillion while T-bills reached over P333 billion.