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Quedancor bond issue oversubscribed |
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By MELODY M. AGUIBA
The Manila Bulletin 06/22/2005 Twelve financial institutions bought into the Quedan and Rural Credit Guarantee Corp.’s (QRCGC) P1.5-billion bond issuance which has been over subscribed by R1 billion, indicating confidence in the prospect of the Philippine agriculture sector. Nelson C. Buenaflor, QRCGC president, said subscription to the credit company’s bond issuance has exceeded the current requirement which signals confidence in the credit firm’s financial performance along with the bankability of the sector it lends to farmers and small and medium agricultural enterprises. "It was over subscribed by P1 billion. Subscribers were banks, investment houses, and insurance companies. There were more which filed a letter of intent to subscribe, but we can only give it to the subscribers who came first," said Buenaflor in an interview. On the issuance report as of June 8, 2005, the biggest subscriber was First Metro Investment Corp., P400 million while the rest of the investors are Bank of Commerce, P215 million; Philippine Savings Bank, P185 million; Keppel Bank Philippines Inc., P100 million; and Allied Savings Bank, P60 million. As of the April 8, 2005 report for subscription of the multi-series bond, subscribers were United Coconut Planters Bank, P200 million; UCPB Savings Bank, P100 million; UCPB Cocolife, P100 million; UCPB Trust Banking, P20 million; Land Bank of the Philippines, P50 million; Philippine Bank of Communications Trust Group, P50 million; and Prudential Bank, 29 million. The bond has a tenor of three years, four years, and five years with a spread of 12 percent. It is passed on by QRCGC to farmers at a rate of 14 to 16 percent per annum. The P1.5 billion bond issuance is part of an estimated P50 billion investment requirement of the Arroyo Administration’s development of two million hectares of agricultural land over the next six years. However, the P1.5 billion is less than half the P3.8 billion borrowing that QRCGC has intended to implement for 2005 in order to augment financing of such farm development which was envisioned to create three million jobs up to 2010. This is the first time that QRCGC, a government-owned and controlled corporation, has raised fund through the capital markets. But it has received overwhelming response on the flotation as it has created a niche in lending to the farm sector through its self reliant team (SRT) program which has proven to put pressure on farmers to repay their debts, bringing QRCGC’s collection rate to 95 to 100 percent. |
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