SEC okays P1.5-B hike in First Gen’s bond flotation

The Securities and Exchange Commission (SEC) has approved the request of First Generation Holdings Corp. (First Gen) for the increase in the size of its bond float to P5 billion from P3.5 billion.

The approval was subject to the condition that First Gen submits an amended registration statement and prospectus to reflect the increase in the bonds to be issued.

First Gen senior vice-president and chief financial officer Francis Giles B. Puno said the increase was sought by the bond issue’s sole bookrunner and joint lead manager ING Bank N.V. which has reportedly received sizable indications for the bonds, especially from the retail sector, even prior to the start of the formal offer.

ING Bank said demand for the bonds has gone up due to the excess liquidity in the market amounting to about P180 billion.

Puno said there were also indications of additional corporate demand for the bonds because of the competitive interest rate which is a premium over the interest rates of other investment vehicles.

"We believe that the additional offer will help in the development of the capital markets specially by providing retail investors with an additional Aaa-rated instrument to place their funds in," Puno said.

The SEC rushed the approval of First Gen’s request to allow the company to complete the offering which is expected to end on June 17. The five-year fixed rate notes will be issued by First Gen at par or 100 percent of face value.

First Gen successfully completed a series of roadshows in Europe, Asia and the United States.

The bond offering is in preparation for the company’s planned initial public offering (IPO) in the second half of this year as part of efforts to raise funds for its expansion program.