SB Capital arranges Php 500M notes issue for country”s largest microfinance institution

SB Capital Investment Corporation (SB Capital), the wholly-owned investment banking arm of Security Bank and one of the leading and most active investment houses in the country, successfully raised Php500 million from the issuance of corporate notes for the Center for Agriculture and Rural Development, Inc. (CARD), the country”s largest microfinance institution (MFI).

The proceeds will be used by CARD to partially finance its medium-term plans to expand its micro-finance activities to benefit a larger base of small entrepreneurs nationwide. The transaction marked the first time that a Philippine-based MFI secured a sizable and 5-year tenor funding facility.

Security Bank President and Chief Executive Officer Alberto S. Villarosa explained that SB Capital”s role as wholesale arranger of funds signifies its commitment to service the underserved microfinance sector. It also gives recognition to CARD Inc. and its financially viable business model that taps into the economic capabilities of the Filipino workers especially women entrepreneurs.

Among MFIs in the Philippines, CARD Inc. has the widest client reach, largest branch network with a near nationwide coverage, and the biggest loan portfolio that provides direct financing, research, development work and economic evaluation in pursuit of its social mission.

“CARD”s experience and expertise in the microfinance sector and Security Bank”s strength as an established financial institution has paved the way for other microfinance institutions to prepare for more sophisticated fund-raising activities”, continued Villarosa.

The local banking industry provided their overwhelming interest as shown by the oversubscription of the corporate notes issue. The financial institutions that subscribed to the notes were Allied Bank Corporation, Banco De Oro Unibank, Inc., BDO Private Bank, Inc., BDO Leasing and Finance, Inc., Rizal Commercial Banking Corporation and Security Bank Corporation.

Washington D.C.-based Grameen Foundation acted as technical adviser to CARD for the transaction while Security Bank Trust Division was designated as facility agent.