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Wednesday, September 2, 2009

CARD Inc Issues 500 Million Notes

CARD Inc., one of the country’s most successful microfinance institutions (MFI), has successfully issued P500 million worth of corporate notes in a deal that involved six major financial institutions.

The five-year, fixed-rate funding facility carries an interest rate of eight to 8.3 percent.

The debt issue involved three financial units of the SM Group of Companies - Banco de Oro Unibank Inc. (BDO), BDO Private Bank Inc. and BDO Leasing and Finance Inc. – along with Security Banking Corp., Allied Banking Corp. and Rizal Commercial Banking Corp. (RCBC).

SB Capital director Manuel C. San Diego said the groundbreaking debt issue was oversubscribed, and that more banks wanted to join the pool.

“We had to limit the players as too many lenders would dilute it into small amounts,” he said.

He said this shows the huge potential the landmark deal would attract other MFIs to undertake similar fund-raising exercises, adding that the transaction proved that the MFI sector is a viable market.

“It is a not a philanthropic activity, it is a viable commercial transaction,” he said.

CARD director for fund resources management Mary Jane A. Parreras said the amount raised would fund the company’s medium-term expansion plans, including branch expansion in the Visayas region and the full computerization of its operations.

Parreras revealed that CARD has an outstanding loan portfolio of P1.8 billion and total resources of P2 billion. It already has P697 million in loan distribution in the first semester of 2009.

CARD currently has 449,043 borrowers, all of which are women, with a loan default rate at just under two percent. It is allied with CARD Bank, a 30-branch rural bank, and the Rural Bank of Sto. Tomas (Batangas), both of which are involved in micro-lending.

The Washington-based foundation has a $60 million global facility for microfinance. Of that, approximately $7 million has been allocated for the Philippines in the form of guarantees and direct loans.

Source: Philstar original article, click here

1 comment:

Anonymous said...

where is the main office and branches for this CARD inc.?