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Ayala Corporation Fixed-Rate Bond
13 November 2007Ayala Corporation is issuing up to PhP 5.0B worth of fixed-rate bonds to refinance their existing debt and for general working capital. The bond has a tenor of 5 years and 1 day. The issue date is November 21, 2007 and the maturity date is November 22, 2012. It has a coupon rate of 6.825% paid every quarter. The coupon payments are subject to 20% with holding tax. The underwriter and selling agents are BPI Capital Corp., BDO Capital and Investment Corp., First Metro Investment Corp., ING Bank N.V., Land Bank of the Philippines, and Standard Chartered Bank. The bonds are sold in denominations of PhP 50,000.00. They are rate PRS Aaa by Philratings.
The offer period begins November 12, 2007.
Banco de Oro Lower Tier II Notes
6 November 2007Banco de Oro will offer to the public PhP 10B worth of unsecured and subordinated notes as part of its capital build up. It will have a maturity of 10 years but Banco de Oro may call it after 5 years. The coupon will be based 7% paid semi-annually. The coupon will incorporate a step up rate if the issuer does not call the note after 5 years. Interest income for individuals is exempt from tax. The issue is negotiable however, the applicable withholding tax will apply on the interest earned based on the length of time the note is held. Minimum amount is PhP 500,000.00.
Lu(c)k of the Draw
20 October 2007Talk about near misses. My colleagues and I had lunch at Luk Yuen the day before yesterday's bomb explosion in Glorietta 2. It had been some time since we had last eaten there and they wanted to go around the mall to unwind. It was just like any other ordinary lunch break and I am sure that is how it appeared to all the diners and shoppers yesterday at 1:30 p.m..
I keep thinking it could have been me there now. Or the explosion might have occured in Greenbelt 2 where we were having lunch at the very moment the incident occured. However, it didn't and I am here another day to be with my wife and kids whom I love very much and to be blessed with all the good things life has to offer. Thank God.
Metrobank Subordinated Note Issue
3 October 2007Metrobank is issuing subordinated notes otherwise known as lower tier-2 notes as part of their capital build up. The issue has a tenor of 10 years callable by the issuer after 5 years which means Metrobank may redeem the note after 5 years. The note carries a coupon of 7% payable quarterly. If they do not redeem the note, there is a step up feature which will add 2.44% to 80% of the prevailing interest rate after 5 years. The issue size is PhP 5.0 Billion. The co-arrangers are ING Bank and Standard Chartered. The selling agents include the arranging banks, Metrobank, First Metro Investment Corp., and Multinational Investment Bancorporation. The minimum amount for investment is Php 500,000.00 with increments of php 100,000.00 after.
Bond Basics
17 September 2007After last Friday's EB, I was originally thinking of writing about UITFs but thought it might be better to discuss the assets held by these funds. Because FM is a bulletin board primarily dedicated to the discussion of the Philippine Stock Market, I presume everyone is familiar with stocks, the holdings of equity funds. The focus of this article will then be bonds which comprise the portfolio of bond, fixed income, and (partly of) balanced funds.
Simply put, bonds represent debt obligations that promise to pay a specified sum of money on a specified future date(s). The issuer of a bond is called a borrower. The investor in a bond is called a creditor. The term to maturity of the bond is the number of years between its issue date and its maturity date. The issuer pays interest on the amount borrowed until the bond's maturity date when the principal is returned and the debt extinguished.
When Things Don’t Go Your Way, Whipsaws, and Other Events
8 September 2007Last August 31, 2007, I entered into a trade with a buy of 3,000 shares of Meralco B at 102.00 The previous night I had studied its chart and concluded that a break out from the neck line of a reverse head and shoulders was about to occur. The volume of shares traded seemed to confirm it and when a senior officer of a foreign bank confirmed that the ERC decision would be out that afternoon and that it would be generally favorable to Meralco, I regarded the trade as low risk despite having risen almost 10% from it's previous drop. After all, the stock's appeared to be stronger than the rest of the market. When the stock closed at 104.00, it seemed that I had made the correct decision.