SEC approves Philippines' first ever corporate debt vehicle

MANILA, Philippines — The Securities and Exchange Commission approved the country’s first corporate debt vehicle in a bid to introduce greater investment avenues for companies amid the pandemic. 

In a statement on Monday, the SEC authorized ATRAM Unitized Corporate Debt Vehicle, Inc. to act and operate as a closed-end investment company. ATRAM will be offering 50 billion units of participation as an exempt transaction. 

A corporate debt vehicle issues or offers for sale its securities, comprised of either shares or units of participation, to buyers not exceeding 19 people in the country. The ultimate goal of this closed-end investment company is investing corporate debts of large corporations and medium-sized enterprises, the SEC said.

Enterprises are considered of medium size if they possess an asset size ranging from P15 to P100 million. 

The regulator said the company's exemption from registration covers ATRAM Unitized Corporate Debt Fund 1, which comprises up to 1 billion units of participation at P1 each.

The company’s first unit class will be offered to qualified buyers within six months from the commencement date, with a two-year term for a minimum investment of P1 million. 

The SEC said that proceeds from the issuance of CDV securities shall be invested in bonds, note, commercial papers, debentures and other evidence of indebtedness, of large corporations and medium-sized enterprises around the country. 

Michael Enriquez, chief investment officer at Sun Life Investment Management and Trust Corp. said this move will introduce more liquidity options for companies. 

“...This can expand the ability of companies to raise funds through direct investments from pooled funds,” he said in a Viber message. 

The SEC noted that ATR Asset Management, Inc. will be the company’s fund manager, principal distributor, transfer agent, and service provider.

“At the same time, this can offer more investment outlets to more sophisticated investors,” Enriquez added.