Corporate bonds registered with the Securities and Exchange Commission jumped 134 percent in 2016 to P280 billion from P120 billion 2015, as many companies took advantage of the shelf-registration program implemented by the corporate regulator.
The SEC attributed the significant increase in corporate bond issuance to the enhanced shelf registration program under the 2015 Securities Regulation Code’s implementing rules and regulations (2015 SRC-IRR).
Under the program, companies are allowed to register and issue securities in tranches on a continuous or delayed basis for a period not exceeding three years. This means the issuers can time their capital raising activities as they are needed and/or when market conditions favor them.
The SEC also provided flexibility in the payment of registration fees by allowing firms to pay based on the value of the securities to be issued and on per tranche basis.
Data showed of the P280-billion registered bonds and commercial papers, around P236 billion or 84 percent were registered through the enhanced shelf-registration system.
Most of these issuances were geared towards the retail market.
Among the corporate bond issuers in 2016 were Ayala Land Inc., DMCI Project Developers Inc., Ayala Corp., SM Prime Holdings Inc., Petron Corp., SM Investment Corp., Arthaland Corp., Double Dragon Properties Inc. and SMC Global Power Holdings Corp.
The 2015 SRC-IRR also provided an improved definition of commercial papers that encourage many companies to issue debt papers. Under the newly issued SRC IRR, commercial paper is now defined as evidence of indebtedness of any person with a maturity of 365 days or less.
Among the companies that registered commercial papers were Cityland Inc., Cityland Development Corp., City & Land Developers Inc., BDO Leasing and Finance Inc. and SL Agritech Corp.
Several companies filed for corporate bond offering this year, including San Miguel Corp. and STI Education Services Group. Alsons Consolidated Resources Corp. filed an application to issue commercial papers.
