Big firms turn to debt market for funds

Big Philippine corporations are tapping fresh borrowings from the financial market to fund their expansion programs.

Infrastructure holding firm Metro Pacific Investments Corp. has tapped P16.5 billion worth of loan facilities from two banks to finance various projects and for other general purposes.

Property giant Ayala Land Inc. (ALI) seeks a leeway to raise as much as P50 billion from the local debt market to fund future expansion plans.

In a disclosure, MPIC said it had entered into a 10-year fixed-rate term loan of P10 billion with BDO Unibank Inc. and contracted a 10-year fixed-rate term loan of P6.5 billion from China Banking Corp.

For its part, ALI’s board has approved the filing with the Securities and Exchange Commission of a shelf registration of up to P50 billion worth of debt paper.

ALI plans to use P30 billion of its P50-billion debt funding program in 2016.

From this shelf registration, ALI plans to issue up to P20 billion worth of corporate bonds and up to P10 billion in commercial paper next year. Proceeds will be used for general corporate purposes, based on an ALI  disclosure.

The bonds and commercial papers are expected to be sold through general public offerings.

Under the SEC rules, companies are given more time to use the shelf registration mechanism, under which securities to be issued in tranches may be registered for an offering to be made on a continuous or delayed basis for a period not exceeding three years.  The issuer is allowed to use the same prospectus for various tranches of securities offering. Doris Dumlao-Abadilla