First Metro Investments Corp, the investment banking arm of the Metrobank Group, said Monday it expects the capital market to remain active, as companies will likely continue to raise funds amid the pandemic.
FMIC head of investment banking Daniel Camacho said companies are looking for fund-raising sources to support working capital requirements, refinance debt or fund acquisitions and other capital expenditures despite the market conditions.
Camacho said companies had several options to raise funds, including bank borrowings and bond and equities offerings.
“These are still accessible in the current environment, with the debt markets having a banner year,” Camacho said.
“The regulatory environment is very supportive and market liquidity is ample,” he said.
Several companies are tapping the bond market as interest rates are at historical lows. The rest of the year would see Ayala Land Inc., Aboitiz Equity Ventures, SM Investments Corp. and Filinvest Land Inc. actively tapping the bond market.
“Investor sentiment continues to be positive as the economy reopens, but understandably interest is on the shorter end with tenors of five years and below. Despite the recent uptick in interest rates, it’s still a good opportunity to raise capital with borrowing costs at these low levels,” Camacho said.
Camacho said property developers might also raise funds through real estate investment trusts. AREIT Inc. of Ayala Land raised P12.33 billion from REIT offering in August.
DD Meridian Park, owned by DoubleDragon Properties Inc., is expected to conduct its REIT offering this year.
Camacho said that as companies adjusted to the ‘new normal’ and the government slowly opened up the economy, the capital markets would remain active and healthy.
“We are eagerly awaiting consumer confidence to return and their pent-up demand boosts companies’ spending and investment, thus increasing issue volumes in the capital markets,” he said.