FIRST Metro Investment Corp., the investment banking arm of the Metrobank Group, on Wednesday said it is the sole arranger of the P1-billion fixed rate corporate notes issuance of Aeon Credit Service (Philippines) Inc., a landmark transaction in the Philippine capital markets.
This is the first-ever issuance under the Asean+3 Multi-Currency Bond Issuance Framework (Ambif) in the country.
The issuance is also the first fully guaranteed debt facility of Credit Guarantee and Investment Facility (CGIF) in the Philippines, and the first security by a restricted issuer and non-reporting company in the Philippine Dealing Exchange Corp’s (PDEx) system.
The notes were offered in three- and five-year tranches. A total of seven noteholders participated in the transaction.
First Metro tapped multiple investors in an initiative to promote investor knowledge and acceptance of the Ambif in the domestic market. The notes were more than three times oversubscribed with total orders reaching P3.25 billion.
As the first domestic issuance under the Ambif and only the second Ambif issuance in the region, the notes facility plays a key role in fine-tuning the implementation of multicurrency bond framework in the Philippines.
It sets the foundation for issuers to tap investors and foreign currencies across Asean+3 countries, and allows investors to participate in intraregional bonds and notes issuances, it said.
“This landmark transaction is a testament to First Metro’s relentless pursuit to develop the Philippine capital markets. Not only were we able to bring another new name like Aeon Credit in the capital markets, we are optimistic that this notes facility will pave the way for similar bond issues and encourage local issuers, particularly those looking to expand their regional presence, to tap the Asean+3 capital markets,” First Metro President Rabboni Francis Arjonillo said.
The Ambif is a policy initiative under the Asian Bond Market Initiative that seeks to facilitate intraregional bond and note issuances by streamlining market practices, documentation and disclosure requirements common among Asean+3 domestic bond markets. Since the framework was first published in 2014, there has been only one issuance done under Ambif—the Thai baht-denominated bonds issued by Mizuho Bank Ltd. in September 2015.
Proceeds will be used to fund the growing loan portfolio of Aeon Credit, which mainly provides tricycle loans, personal loans and consumer product loans for Filipinos with limited access to financial services.
CGIF, a trust fund of the Asian Development Bank, commenced its guarantee operations in May 2012 and seeks to provide credit enhancements, mainly in local currencies, issued by credit-worthy Asean+3-domiciled bond issuers.
As the first security by a restricted issuer and nonreporting company in the PDEx enrollment system, the issuance signifies the expansion of Philippine capital markets to accommodate new types of issuers.
Strong support from the Securities and Exchange Commission and the Philippine Dealing System has facilitated the implementation of guidelines that now allow companies covered by the 19-lender limit charter restriction and companies not previously listed on an exchange platform such as the PSE, to be enrolled in PDEx.