RP debt markets tracking 2009 record volume

MANILA, Philippines - The volume of debt transactions in the first half of 2010 is tracking the record level of P263 billion achieved last year.First Metro Investment Corp. (FMIC) director Melo Bautista said estimates place the volume at roughly P114 billion in the first six months of the year.

“So far, the first semester of 2010 is tracking the rate of 2009,” Bautista said in a press presentation yesterday.

The P263 billion was raised by both private and government sector for mergers and acquisitions (M&A), medium and long-term general fund raising and corporate expansion programs.

In the first quarter of 2009 alone, San Miguel Brewery Inc.’s P38.8-billion bond sale made its mark as the country’s largest, and hailed by international investment magazines as the “Best Deal of 2009” in both the domestic and Asian markets.

“That is a hard act to follow,” the FMIC official said.

FMIC executive vice president Roberto Juanchito T. Dispo said the government will still have to tap the country’s capital markets to fund its infrastructure projects as well as fund its maturing debts in the second half of 2010.

The Power Sector Assets and Liabilities Management Corp. (PSALM) is contemplating some P20 billion to finance maturing debts as it failed to dispose of assets of the National Power Corp. (Napocor). It has earlier tapped the capital markets, rasing P15 billion.

Napocor likewise is eyeing the debt market to raise P15 billion this year. It has P73 billion worth of maturing loans this year.

Dispo also noted that other government owned and controlled corporations (GOCCs) have decided to enter the debt market.

The Philippine Export-Import Credit Agency (PhilEXIM) has allotted P1.5 billion for relending to small and medium enterprises (SME) including the export sector.

PhilEXIM is a government financial institution attached to the Department of Finance (DOF) focusing in trade financing such as direct lending, guarantees, export credit insurance to SMEs, large corporate accounts and government specific priority sectors.

Also, the Home Guarantee Corp. is planning to recapitalize through the capital markets to raise P30 billion.

The SB Corp. is also mulling raising capital although no amount had been revealed.

Dispo said that sometime in September this year, they would be involved in refinancing retail treasury bonds (RTBs) the amount ranging from P50 to P60 billion “depending on the Bureau of Treasury (BTr).”

The FMIC also expects more activities in the capital markets coming from the private sector on issues of M&As and expansion.