Risk-averse funders swarm PH corporate bonds

The listing of Robinsons Land Corp.’s P15-billion fixed-rate bonds was marked by the ringing of the ceremonial bell by (L-R) First Metro Investment EVP/investment banking head Daniel D. Camacho; China Bank Capital Corp. president Ryan Martin L. Tapia; BPI Capital president Rhoda A. Huang; RLC chief financial, risk and compliance officer Kerwin Max S. Tan; RLC president and CEO Frederick D. Go; Philippine Dealing and Exchange Corp. president and CEO Antonino A. Nakpil; BPO Capital and Investment Corp. president Eduardo V. Francisco, and SB Capital Investment Corporation president Virgilio Chua.

After a year of caution, key business groups are returning to the local retail bond market in a big way and their debt securities are selling like hotcakes as cash-awash but risk-averse investors steer more funds to fixed-income options.

When property developer Robinsons Land Corp. (RLC) recently offered three- and five-year bonds to the public, investor demand reached almost P120 billion or 12 times the base offer of P10 billion.

“It is continuing evidence of the funding power of domestic investors, given that there is a large issuance of the national government currently in progress,” Philippine Dealing & Exchange Corp. Antonino Nakpil said on Friday during the listing of RLC’s bonds on its platform.

RLC upsized its offering by P5 billion to P15 billion to take advantage of strong investor demand despite an ongoing Retail Treasury bond (RTB) offering that came to market around the same time.

The three-year RLC bonds carried an interest rate of 5.3789 percent per annum while the five-year tenor was priced to yield 5.9362 percent per annum.

“It can only be good when an old conglomerate, a veteran of crisis past, comes to the debt market, as it again signals the continuing march forward to recovery despite challenging circumstances. The experienced firms continue to lead the way to show the other enterprises how businesses can thrive even through difficult times,” Nakpil said.

Returning to the market

“This year, we are happy to see RLC joining its peers, the old guard, all jointly coming back to the public debt markets after a year of caution,” he said.

In an interview at the sidelines of the listing ceremony, RLC president Frederick Go expressed optimism that RLC could continue its earnings momentum, adding that the two businesses that underperformed during the pandemic lockdowns—hotels and malls —were now picking up with the reopening of the economy.

On the shopping mall business, Go estimated that foot traffic was now hitting about 85 percent of prepandemic level and rental earnings have reached about 90 percent of pre-COVID-19 levels.

Go expects full normalization of mall leasing business by the end of the year.

RLC’s bond listing brought to P371 billion the total value of new fixed-income issuances listed on PDEx this year. Nakpil said this was but a “stone’s throw away” from the record-high P387 billion seen in 2020.

The bond offering marks the first tranche of RLC’s maiden P30-billion debt securities program under the three-year shelf registration window of the Securities and Exchange Commission.

“A year after setting the record for listing the largest real estate investment trust (REIT) in the Philippines with RL Commercial REIT or RCR, we are delighted to return in a big way to the capital markets with yet another landmark transaction,” Go said. INQ