SB Capital Investment Corporation, the wholly-owned investment banking arm of Security Bank Corporation, successfully arranged and managed, together with RCBC Capital Corporation, Asialink Finance Corporation’s initial foray into the debt capital market space with the signing of the company’s PHP2 billion privately-placed fixed rate notes facility.
SB Capital’s parent company, Security Bank, led the list of participating noteholder banks for the transaction which also included Rizal Commercial Banking Corp., EastWest Bank, Philippine Bank of Communications and Union Bank of the Philippines.
Virgilio O. Chua, President and CEO of SB Capital, underscored the pivotal role that banks and financing institutions such as Asialink play in fostering and promoting financial inclusivity in a fast-developing economy like the Philippines. “Asialink, through its loan products such as Car/Truck Refinancing and Pre-owned & Brand-New Car/Truck Financing, MSMEs and individuals who may not be able to get the capital that they need through more conventional avenues, are still able to get the required funding, which aids in bridging this financing gap,” said Chua.
Chua noted that in a 2020 MSME Value Chain Rapid Response Survey, the United Nations Development Programme determined that 99.5% of business establishments domestically are MSMEs with such businesses providing 63% of the Philippines’ workforce while contributing 40% of the nation’s GDP. Despite this, the 2021 Financial Inclusion Survey conducted by the BSP showed that banks only accounted for 4% in terms of sources for funding for such borrowers.
Asialink intends to utilize the proceeds from the notes issuance to support and finance expansion of the company’s loan portfolio, refinance existing short-term debt obligations, and for general working capital requirements. Asialink offers collateral and non-collateral credit loans that cater to the financial needs of businesses, particularly small and medium enterprises, and individuals. Asialink aims to assist the unbanked and underserved market through its 86 branches nationwide (as of end 2022). As of December 31, 2022, collateralized loans accounted for 99.71% of the Company’s total loan portfolio.
The corporate notes, which had its initial drawdown date last August 25, 2023, are set to mature in three years’ time.