SMIC to offer P10B Retail Bonds

SM Investments Corp’s (SMIC) plan to raise P10 billion in peso-denominated retail bonds has been approved by the Security and Exchange Commission. This will be SMIC’s debut in the local bond market. SMIC usually raise funds through private placements.

The proposed issuance of fixed-rate domestic retail bonds is pegged at a minimum P20,000 investment per transaction. I think this is one of the lowest minimum investment for corporate bonds this year.

The bonds will be issued in two tranches maturing either in five or seven years. The bonds shall be jointly underwritten by BDO Capital & Investment Corp., BPI Capital Corp., China Banking Corp., Union Bank of the Phils., and RCBC Capital Corp., SMIC said. (new from Inquirer)

Petron to issue Php 15B fixed-rate notes

Petron Corporation, the country’s top oil refiner, aims to raise upto P15 billion or $310 million via a private placement of fixed-rate notes starting May, according to Eric Recto, the company’s president. Recto said that proceeds of the notes issue will be used to fund the company’s five-year expansion plan worth $700 million to $1 billion. No word yet on the mechanics of the notes issue, or wheather it will be open to small investors.

The company is now fully private, after the government’s stake was sold to Ashmore. Late last year, San Miguel Corporation entered to an agreement with Ashmore, with some SMC executives now occupying key positions in the management of Petron.

Aboitiz Power to sell Php3B Bonds Offer

The rates of Aboitiz Power’s 3 billion pesos has been set for its offer of three-year and five-year fixed rate bonds. The three-year bonds would carry an 8.0 percent coupon and the five-year bonds an 8.7 percent coupon, or a premium of slightly over 220 basis points against best bids for comparative local Treasuries. The minimum investment is 50 thousand with increments of 10 thousand for additional invesments.

Aboitiz Power will use the offer proceeds to partly finance its acquisition of the Tiwi-Makban geothermal power plant from state-run National Power Corp.

The company has picked BDO Capital & Investment Corp, BPI Capital Corporation, First Metro Investment Corp and ING Bank Manila branch as joint lead managers.

It is good to see that local companies have been tapping local investors for their bond offerings. After Globe and San Miguel, Aboitiz is the latest addition of blue chip companies who is confident that they can source investment requirements domestically. It is also surprising to see these bonds offer minimum invesment of 50 thousand, where an average office employee can put his savings. These bond offerings are selling like hotcakes, and it only shows there is enough liquidity in the Philippine market despite the global economic turmoil. I think it is time for government to issue retail treasury bonds/bills again to source its pump priming activities.

Condo Hunting Experience

I have been scouting for condominiums for quite some time now. Considerations include AVIDA, Belton, Camella, and Victoria station. However, the steep down payments and monthly dues turn me off as I am just meeting ends. I cannot believe that at my salary, which is equivalent to Director 1 level in most government agencies, cannot still afford even a low income condominium. Low income condominium ranges from 2M to 4M, according to an Ayala agent. Condominium is a very attractive option for me since I am not willing to wake up at 5 and go through traffic to beat our bundy at 8am. With the current economic crisis, expectations are geared toward slow condo sales. I was also expecting that prices may after all fall down due to weak demand, thereby adjusting the equilibrium price. I went to a condo launching event to find out if my theory is correct. The recent addition to growing list of condo projects in Makati is Victoria Station. If your riding MRT, their other project is in EDSA Kamuning. They launched (or re-launched) their condo project on Wednesday. I thought the event was a reception of some sort. There are white tables with people eating while talking to a sales agent. There is also a chocolate fondue but I never got to try it out. Food and drinks are free flowing. The event was held right at the center of the site where the condo shall be built. The sale agent was very accomodating. She tries to answer every question that I throw at her, except for one. I asked her what will happen and how can I get my money back is the project will not push through. She fumbles. She said it will never happen and if on the slightest of possibilities she is sure the developer will be able to return the money. Even at 8PM, the event is still crowded. However, most of the curious would be owners are either retirees or average joe. This is good if the average joe can accomodate the condo. I rarely saw employees on the event. While the event and food are just ok (no programs whatsoever, just straight to business discussion) there is one thing lacking in the site – a showroom! How can they launch a condo project whitout a showroom? People may have a hard time imagining the layout of a bi-level condominium through pictures only. They offered the showrooms of Manila and Fort, but going there is definitely troublesome. What’s more, the agent “threatened” a price increase if I will get the unit after 10am the following day. Reservation is P25k. Thanks but no thanks. I will not decide in a hurry. Investing in a house is the most expensive purchase in my life, and I will not decide in less than 24hrs. Paging AVIDA and Belton. Kindly lower your prices so that I can finally buy my piece of space in Makati…

Globe bond offer now P5 billion

Did you missed out the bond offering last week? Here’s your chance to get hold of Globe’s 3-year and 5-year bond. Globe Telecom and the underwriters for its P3-billion corporate bond issuance have agreed to double the amount of oversubscription to P2 billion due to increased investor interest.

If you want to diversify your portfolio and have at least P50,000 to spare, I suggest you consider this one.

Globe Telecom’s P3-billion bond issue

Telephone lines of BPI branches has been sending busy tone yesterday morning, February 12, as it marks the start of Globe’s P3-billion bond issue. See related story here. It is selling like hotcakes! Investors are all in a hurry to avail themselves of the offering due to Globe’s good track record. I think it will be oversubscribed by Monday.

The P3-billion corporate bonds will be issued in three-year and five-year notes, with an over subscription option worth up to P1 billion. The three-year bonds, maturing in February 2012, will carry an interest rate of 7.5 percent while the five-year bonds, due on Feb 2014, will have an eight percent return, to be paid quarterly.

With the current low interest rate environment this latest offering is a good investment alternative for a minimum of P50k. However, I did not availed it since I also have a corporate bond of a Government Corporation offering 5% per annum rate, tax free, maturing also on 2012. And this is almost risk free since it is backed by the government.

I hope more investment opportunities like this at a higher coupon rate will be made available in the future.

Personal Finance – What I Learned

I have read so many websites, blogs, and books. The tendency is to be confused with contrasting teachings of these self-made financial guru’s. With the current financial crisis, many are now questioning what the best move for their hard earned finances. My twenty five cents? It depends on what applies to you. More confusing? Let me share my own personal experience and try to see if it fit yours.

 

1) Save first. This is the sure ball way to attain financial growth, albeit the slowest. Before dipping your hands to investment, build-up your emergency fund at least 6 months worth of living expenses. This will cover food, shelter, clothing, and other regular expenses for the month in case of emergency.

 

In my case, I already have 6 months worth of reserves tucked in a Time Deposit, but I’m planning to shop around as my TD rate is not earning enough. The idea is to have readily available cash in case of urgent need, so don’t place it on Mutual Fund and Stocks because you cannot withdraw your money immediately. Also, if the stock market crashes your reserves will definitely be depleted. Having this reserve stashed in a bank will also give you peace of mind if your investments turned sour.

 

As to the mode of savings, paying myself first (putting aside an amount before spending) works for me. It is very workable. I started when my salary was still Php10k. Once you have the habit you will get used to it. This system limits me to spend, and I have a rule to use my plastic on weekly grocery items only, which gives me an almost constant bill at the end of the month. It maybe hard, but you have to look the other way when you pass buy Starbucks, iPhone store, Macbook outlet, or Nokia center.

 

2) Invest the rest.

 

After building your 6 month reserves, it is now time to invest. There are lots to choose from, but my twenty five cents is to try it one at a time. By trying it, you will get the actual feel of doing it, and then you can decide if the investment vehicle is right for you or not.

 

I started with a government corporate bond. It is tax free and the rate that time was 8% per annum (now it is only 5%). Because my salary was very low I only managed to place P10k. P800 was not bad earning for starters, right?

 

Then I tried stocks through a friend (rider). I was able to earn 30% of my investment (around 10k also). I tried it again but bear market came. Now, I’m still waiting for the market to turn around, but my investment is also not that big.

 

Then I tried Mutual Fund. I tried Philam through GSIS kinabukasan fund, but their service is not great. However, the fund (a balanced fund) gave a fantastic return last year. Now, it is affected by financial crunch, and all I see on ICAP website is red. Again if you have the patience for their service (delayed statements, not responding agent), then try it.

 

What I enjoyed most is Sunlife. They have online notification via email, regular statement, and clear prospectus. I’m tempted to put all my money there, but diversification rule says do not put all your eggs in one basket. Maybe its time to shop around for other MF when the market bounces back.

 

3) Business. Or sideline/part-time job that can increase your income. What’s hot now is seasonal business. Christmas season is a great opportunity. It makes you earn for the season but not tie you up for the rest of the year. Join bazaars. Buy your stuffs from Divisoria or Quiapo. Your doing your costumers a favor by bringing their products closer to them.

 

Here’s my initial twenty five cents on personal finance. I will add more soon.