1. Private Corporate Bonds
|Instruments||A. Long-term Commercial Paper (LTCPs)|
B. Private Corporate Bonds
|Tenor||2 - 7 years|
Usually, floating with reprised quarterly with payments based on the actual number of days in an interest period on the basis of a 365-day year.
|Average Issue Size||PHP1 to 3 billion|
|Minimum Amount of Bid||
For issues of up to two years - PHP100,000; issues between two years and four years - PHP50,000 and for issues of four years and over - PHP20,000.
|Method of Sale in the Primary Market||
Underwritten basis by financial institutions licensed by the Securities and Exchange Commission and authorized by the issuer
|Who May Apply||Institutional and retail resident and nonresident investors.|
LTCPs and corporate bonds are redeemed at par upon maturity.
Interest income subject to a 20% final withholding tax.
|Secondary Market Trading||
Extremely limited, mostly between financial institutions on behalf of retail investors.
The financially healthiest Philippine companies dominate the private debt market. Manufacturers and financial intermediaries/holding companies are by far the largest issuers of domestic commercial paper. These are local conglomerates such as the Ayala Corporation and San Miguel Corporation.