capital market issuances - fami
TRANSCRIPT
Capital Market Issuances
January 10, 2013
2
Disclaimer
This presentation has been prepared by First Metro Investment Corporation (“FMIC”) in order to indicate, on a preliminary basis, the feasibility of a possible transaction or transactions. This presentation is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by FMIC and may not be disclosed to any third party or used for any other purpose without the prior written consent of FMIC.
The information in this presentation reflects prevailing conditions and our views as of this date. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the Company or which was otherwise reviewed by us. The contents of this document are subject to corrections or changes at any time. Nothing contained in this presentation is, or shall be, relied upon as a promise or representation as to the future.
The Company shall not (a) copy or reproduce this presentation in any manner or for any purpose, (b) disclose this presentation to any other person, transfer or transmit this presentation in any form or by any means outside the location to which FMIC has sent it without the prior written consent of FMIC, (c) alter, change, or extract from the presentation any identifications, including notices which indicate ownership by FMIC (and its licenses), or (d) attempt to modify the presentation. FMIC shall not be responsible for the output generated by the presentation by reason of its use by any person other than an authorized FMIC employee.
This presentation has not been and will not be independently audited on behalf of FMIC.
The Company cannot rely on its use of this presentation for any purposes whatsoever. For the avoidance of doubt, FMIC:
(i) does not owe or assume any duty of care or responsibility to the Company or any other person who uses this presentation or any information derived from its use by the Company;
(ii) does not name any representation or warranty (express or implied) to the Company or any other person who uses this presentation as to the accuracy or completeness of them or any information therein or derived therefrom; and
(iii) shall not be liable to the Company or any other person for any loss or damage (whether special or consequential or otherwise) arising directly or indirectly from any use of, inability to use or reliance in operating electronic versions of the presentation or any information derived from them.
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Review
Prospects
Outline
Capital Raising
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2009 2010 2011 2012 2013
Total Corporate Bonds and Equity
94,600
128,500
-
20,000
40,000
60,000
80,000
100,000
2009 2010 2011 2012 2013
Total Corporate Bonds Raised
83,500
99,300
21,000
64,000 55,800
-
50,000
100,000
150,000
200,000
250,000
2009 2010 2011 2012 2013
Total Primary Equity Raised
38,800
85,000
107,500
219,000
175,100
149,000
318,300
258,600
• Upward momentum largely intact over last 5 years despite 18% decline over 2012
• Equity raising started strong but hindered by Tapertalk in May
• Bond Issuance accelerated only in 2H2013
• A total of PhP175 Bn was raised in
2013 or a 20% decline
• Big ticket IPOs nonetheless done in
late 2013 but the index was not
cooperative
• Overnight top up placements
Source: Philippine Stock Exchange
In 2013, PSEi rewrote record highs 31 times at
the start of the year. Dec.27 which was the
last trading day for the year, the PSEi finished
at 5,889.83, practically flat to 2012 index
5,812.73 close.
Source: Bloomberg
Equity Capital Market
Public Offerings and Private Placements Raised through the PSE
-
50.00
100.00
150.00
200.00
250.00
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
In P
hp
Bn
s
PP
IPO/FOO/SRO
How it was cut up – Equity
Source: PSE, various
Private Placements
23%
Stock Rights
Offerings 24%
IPO (Primary
Offerings) 11%
Follow-On (Primary
Offerings) 42%
2012
Total No. of Deals:
33 Private
Placements 65%
Stock Rights Offerings
0%
IPO (Primary Offerings)
35%
Follow-On (Primary
Offerings) 0%
Total No. of Deals:
40
2013
Share to Total Capital Raised
In 2013, First Metro Philippine Equity
Exchange Traded Fund Inc. (FMETF),
the country’s first ever exchange
traded fund (ETFs) was listed at the
Philippine Stock Exchange (PSE).
7 companies were listed on the PSE through IPO raising approximately Php 61Bn:
• Philippine Business Bank
• Asia United Bank • AG Finance, Inc. • Harbor Star Shipping Services, Inc. • Robinsons Retail Holdings ,Inc. • Travellers Hotel Group Inc. • Concepcion Industrial Corp.
Del Monte Pacific Ltd. listed by way of introduction.
Equity Capital Market
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
2010 2011 2012 2013
624,000 244,000
99,300 83,500
557,000
535,000
687,000
651,500
Corporate Government
(In
Ph
p M
n)
786.3 Bn
735 Bn
779 Bn
1,181 Bn
• The bond market steadier with a decline of only 6%
• Government sector (FXTN and RTB) issuance is lower by 5%
• As reported last year, for the “usual suspects”, diversification of funding sources from bank financing as a strategy by large corporates
• Slow activity in first half as equity
valuations were attractive
• Corporate bond accelerated only
in the second half.
Source: FMIC Estimates
Note: Corporate debt includes loans and project finance.
Domestic Debt Capital Markets
Bonds Breakdown
Domestic Debt Capital Markets
The Last Quarter
IssuerAmount
(in PHP Bln)Issue Date Coupon FMIC Role
Ayala Land, Inc. 6.0 10-Oct7Y: 4.625%
20Y: 6.000%Joint Issue Manager
Filinvest Land, Inc. 7.0 8-Nov7Y: 4.8562%
10Y: 5.4333%Joint Issue Manager
Rockwell Land Corporation 5.0 15-Nov 5.0932% Sole Issue Manager
Aboitiz Equity Ventures 8.0 21-Nov7Y: 4.4125%
10Y: 4.6188%Sole Issue Manager
Meralco 18.5 5-Dec7Y:4.375%
12Y:4.875%Joint Issue Manager
Total 44.5
However, accelerated bond issuance in the last 3 months of 2013 where P44.5 billion was successfully raised; more than half of full year volume
Firm pipeline for 1Q2014
Review
2014 Outlook
Outline
Outlook 2014
Equity market to remain a financing option but will be challenged by timing and valuation
• Market will be selective based on fundamentals, earnings/growth prospects, business models, and multiples
• On macro basis, capital expected to flow back to selected EMs despite Tapertalk but volatility expected
• Dependable sectors such as branded consumer, retailing, even property with clearer business models (e.g., recurring income, market niching)
• Impact of Basel III on domestic equity underwriting
Outlook 2014
Meanwhile, debt capital market to remain strong …Prefunding will be the theme
• Rates Still Low, despite recent rise. Still relatively and sufficiently low to support business IRRs
• Available tenors continue to be favorably long
• Market continues to be liquid. Recent Tapering announcements reduce uncertainty
• While Corporates expected to continue to seek to diversify financing options away from bank borrowing, banks may be incentivized to more actively invest in corporate bonds due to a) risk weighting advantages under Basel III, and, b) recent clarification of BIR RR 4-2011
• Corporates expected to accelerate tapping the bond market especially in the first half for prefunding largely to mitigate uncertainty
Outlook 2014
Infrastructure and Utilities
• Reconstruction
• Infrastructure – Government target of 5% of GDP
• PPP, Finally?
• Power Project Financing
M & A to continue
• Majority shareholders consider taking profit
• Consolidation anticipating AFTA, as financing continues to be accessible
Capital Raising - 2013
• Total Debt issuances for 2013 decreased by 60% or approximately Php597Bn YoY 2012.
• In the equities market, total capital raised also decreased by 20% or Php44Bn from Php219Bn in 2012 to Php175Bn in 2013.
Amounts Raised
0
50000
100000
150000
200000
250000
300000
350000
2009 2010 2011 2012 2013
In P
hp
Bill
ion
s
Equity
Bonds
219
175
107.5
2013 2012
Amount Raised by Product Type
*Others include LTNCDs and Project Finance Source: PDEX, PSE, Bureau of Treasury, FMIC internal sources
Notes 13%
Bonds 41%
Loans 4%
Others 11%
Equity 31%
Notes 16%
Bonds 58%
Loans 2%
Others 2%
Equity 22%
85
38.8 99.3 83.5
21 64
55.8
Industry Spread Based on Transaction Size 2013
Private Sector
Capital raising for peso-denominated deals in the country covers a diversified range of industries. Majority of the deals came from the Industrial sector (42%) Holding Firms comprised 19% while Property accounted for 15%
16 Source: FMIC internal sources
Financials Holding Firms
Services Industrial
Property Mining and Oil
42% 13%
19%
10% 1%
15%
Industry Spread in the Domestic Capital Markets
2013 FMIC Deals
Aboitiz Equity Ventures
PHP8,000,000,000 7-year & 10-year
Fixed Rate Bonds
Issue Manager & Lead Underwriter
November 2013
Rockwell Land Corporation
PHP5,000,000,000 7.25-year Fixed Rate Bonds
Issue Manager & Joint Lead Underwriter
November 2013
Development Bank of the Philippines
PHP5,000,000,000 LTNCD
Selling Agent
November 2013
Filinvest Land, Inc.
PHP7,000,000,000 7-year & 10-year Fixed Rate Bonds
Joint Issue Manager & Joint Lead Underwriter
November 2013
PHP18,500,000,000 7-year & 12-year
Fixed Rate Bonds
Lead Underwriter &
Bookrunner
December 2013
Manila Electric Company Ayala Corporation
PHP10,000,000,000 Preferred Shares
Lead Underwriter
November 2013
Ayala Land, Inc.
Manila Water Company, Inc.
PHP5,000,000,000 Term Loan Facility
Sole Arranger
August 2013
Ayala Land, Inc.
PHP6,000,000,000 7-year and 20-year Fixed Rate Bonds
Co-Lead Manager
October 2013
Philippine National Bank
PHP 5,000,000,000
LTNCD
Selling Agent
August 2013
Philippine National Bank
PHP 5,000,000,000
LTNCD
Selling Agent
October 2013
Therma South- Aboitiz Power Company
PHP24,000,000,000 Project Loan Facility
Co-Arranger
October 2013
Republic of the Philippines (Bureau of the Treasury)
PHP150,000,000,000 10-year
Retail Treasury Bonds
Co-Issue Manager
August 2013
PHP15,000,000,000 10.5-year
Fixed Rate Bonds
Co-Lead Manager
July 2013
Federal Land, Inc.
PHP5,000,000,000 Fixed Rate Corporate Notes
Sole Arranger & Bookrunner
July 2013
SM Development Corporation
PHP6,200,000,000 Fixed Rate Corporate Notes
Sole Arranger & Bookrunner
June 2013
Property Company of Friends, Inc.
PHP3,000,000,000 Medium Term Notes Facility
Arranger
June 2013
PHP16,800,000,000 Top-up Placement
Joint Domestic Lead Manager
June 2013
National Grid Corporation of the Philippines
PHP29,500,000,000 Corporate Notes
Joint Lead Manager & Bookrunner
July 2013
Cosco Capital, Inc.
Beacon Electric Asset Holdings, Inc.
PHP17,000,000,000 PHP9,000,000,000
Corporate Notes
Joint Lead Arranger & Bookrunner
March 2013
July 2013
Toledo Power Company
PHP7,000,000,000 Project Loan Facility
Mandated Lead Arranger
March 2013
Asia United Bank
PHP8,360,000,000 Initial Public Offering
Joint Domestic Lead Underwriter
May 2013
Megawide Construction Corporation
PHP2,374,596,000 Top-up Placement
Domestic Manager & Joint Bookrunner
May 2013
Philippine Business Bank
PHP3,192,002,100 Initial Public Offering
Joint Lead Underwriter & Bookrunner
February 2013
Megawide Construction Corporation
PHP4,000,000,000 Corporate Notes
Sole Arranger & Bookrunner
February 2013
GT Capital Holdings, Inc.
PHP10,000,000,000 7-year and 10-year Fixed Rate Bonds
Issue Manager, Bookrunner & Joint Lead Underwriter
February 2013
2013 FMIC Deals
Domestic Debt Capital Market
• Slow activity in first half as
equity valuations were
attractive
• Corporate bond accelerated
only in the second half.
• Still high over 5 years
Source: PDEX. As of December 31, 2013.
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
2009 2010 2011 2012 2013
Corporate Bonds
55,800 64,000
21,000
99,300
83,500