GT Capital bond sale raises P5B

The low interest rate environment and sufficiently liquid financial system allowed business tycoon George S.K. Ty’s investment holding company to easily raise P5 billion worth of corporate funds. GT Capital Holdings Inc. issued three- and five-year bonds to raise money for its various corporate undertakings and the sale was met by strong demand. In a statement sent by e-mail, Tess Perfecto of First Metro Investment Corp. or FMIC, the investment banking arm of Metropolitan Bank and Trust Co., said the bond sale was so attractive that subscriptions almost tripled. “Solely arranged by FMIC, the issue was subscribed to by sixteen participating lenders which were a mix of banks, trust companies and mutual funds. Strong demand from the lenders led to the issue being 1.7 times oversubscribed," she said. No better time to tap the market According to Perfecto, this was the first time GT Capital had tapped the market for funding and its efforts could not have come at a better time. Short-term interest rates as indicated by the 91-day Treasury bill rate are close to zero and even the policy rates of the Bangko Sentral ng Pilipinas (BSP), which help anchor bank lending rates, remained unchanged at 4 percent for borrowing and only 6 percent for lending. Global funds favor emerging markets like the Philippines — where investment returns are superior to that offered by the more advanced markets — feed the liquidity in the system that in turn drive local interest rates further down. Public-private partnership BSP Gov. Amando M. Tetangco Jr. recently said that with this much liquidity in the market, bank lending growth averaging 10 percent as of last count “should accelerate further," particularly when the government’s Public-Private Partnership (PPP) program shall have started. The PPP is an infrastructure-oriented program meant to ensure sustained economic growth for the long haul. Part of the funding of various government construction projects would be coming from banks, Tetangco said. GT Capital is heavily invested in Metrobank, Federal Land Inc., Philippine AXA Life Insurance, Toyota Motor Philippines and the holding firm Global Business Power Corp. which specializes in power generation companies. — MRT/VS, GMANews.TV