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Business

RCBC sees more corporate bond issues

- Ted P. Torres -

MANILA, Philippines - RCBC Capital Corp., the investment banking arm of Rizal Commercial Banking Corp., is holding talks with a number of prospective issuers of corporate papers looking to raise fresh capital for capital expenditure expansion or replacing maturing debt issues.

RCBC Capital president and chief executive officer Jose Luis F. Gomez said while it is still premature to discuss the size of the capital-raising efforts, the amount will be substantial, but not as large as 2010.”

The prospective issuers are mainly second-tier corporates, mostly in the power sector, following top-tier corporates San Miguel Group, the Lopez Group and the Aboitiz Group which had tapped the country’s debt market last year.

Last year, Philippine corporate bonds issued by the top-tier corporates reportedly reached P368 billion, still excluding those that tapped the international capital markets and the public sector issues.

Gomez said the estimated combined amount of private placements for 2011 are huge that RCBC Capital may have to form syndicates or consortiums since it is limited by the single borrowers limit (SBL), equivalent to 25 percent of the net worth of a bank or investment bank.

He said some of the prospective issuers are interested in private corporate placements.

Private corporate placements are unique in that it involves relatively smaller amounts and smaller number of investors (maximum of 19 investors), unlike in the case of public debt offer or the secondary market.

“Rates are low that they want to take advantage of the situation. On the other hand, the equity market has become bearish due to the various external factors, such as the political unrest in the Middle East, North Africa and the March 11 disaster in Japan,” Gomez said.

RCBC Capital ranked among the top five local private underwriters of public debt offers for 2010, having underwritten bond issues for Ayala Corp., Tanduay Distillers Inc. and some local government units (LGUs). It acted as joint issue manager and joint issue coordinator for the P97-billion retail treasury bonds (RTBs) of the Republic of the Philippines; and the combined P49 billion worth of private debt issues comprised of notes and project finance deals for United Laboratories Inc., Century Canning Corp., Panay Energy Development Corp., and SM Development Corp.

vuukle comment

AYALA CORP

CAPITAL

CAPITAL CORP

CENTURY CANNING CORP

DEVELOPMENT CORP

GOMEZ

JOSE LUIS F

LOPEZ GROUP AND THE ABOITIZ GROUP

MIDDLE EAST

NORTH AFRICA AND THE MARCH

PANAY ENERGY DEVELOPMENT CORP

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