PDEx sees banner year for bond issues

MANILA, Philippines - Philippine Dealing and Exchange Corp. (PDEx), the country’s trading platform for fixed income securities, will likely post a banner year for 2014 as more companies raise funds through the bond market.

The amount of bonds to be listed this year in the PDEx is seen to eclipse the all-time high of P111 billion recorded in 2012, its top executive said.

“Definitely we will reach the P100 billion level...this will be a record year,” said PDEx president and chief operating officer Cesar Crisol.

He said the previous high of P111 billion posted in 2012 will be breached this year given local companies’ moves to tap the bond market.

“Right now, the issuers go to the capital markets to be able to tap the liquidity. Investors are also looking for the corporate bonds that have a premium over government securities,” Crisol said.

So far, seven issuers listed 12 series of bonds worth P89.8 billion in the PDEx. Major listings include the P30-billion bonds of JG Summit Holdings Inc. and P15 billion bonds of San Miguel Brewery Inc.

In 2013, eight firms issued 16 series of long-term bonds totaling P83.5 billion.

For the issuers, Crisol said raising funds from the bond market is an opportunity to ease up on the single borrowing limits with the banking system, which is facing changes due to the implementation of Basel III.

Basel III introduces a complex package of reforms designed to improve the ability of bank capital to absorb losses, extend the coverage of financial risks, and have stronger firewalls against periods of stress.

In the pipeline of bond issuances are SM Investments Corp.’s P15-billion retail bonds and Cebu Holdings Inc.’s P5-billion debt papers.

Crisol said both the bond and stock markets are benefiting from strong investor confidence.

“We have become a darling of the region being part of the investment grade countries. Hopefully, foreign investments will further come in,” Crisol said.

Major debt watchers Fitch Ratings, Standard & Poor’s, Moody’s Investor Service and Tokyo-based Japan Credit Rating Agency Ltd. last year gave the Philippines an investment grade rating.

To date, there are 25 issuers and 69 securities worth P406.01 billion listed in the PDEx. Issuers include Robinsons Land Corp., Ayala Corp., Megaworld Corp., Aboitiz Equity Ventures Inc., Ayala Land Inc. and Metrobank.