RTB

Ayala Land (ALI) offers 5%, 10-year bonds

Most Filipino investors nowadays seem to be enamored with stocks as an investment option. This is not bad per se, but intelligent investors understand that a critical element of their overall investing strategy is portfolio diversification.

Diversification simply means investing in a variety of asset classes in order to reduce portfolio risk. Because asset classes have imperfectly correlated relationships, both in risk and return, investors gets to minimize their losses when they are diversified as compared to when they are not diversified.

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Philippines to issue 25-year RTBs

The Philippines will again issue to the public retail treasury bonds or RTBs as a way of raising funds. The good thing with this debt instrument is that individual investors may have the opportunity to avail of this product because RTBs are sold in retail and do not require huge cash outlay.

In fact, minimum investment is only P5,000 (US$120), with additional investments also in multiples of P5,000 — making RTBs more accessible to the average Filipino investor.

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Investment Product: DBP’s Tier 2 notes

The Development Bank of the Philippines (DBP) recently issued P6.5 billion worth of unsecured and subordinated tier 2 notes with a 7.75% coupon rate.

The notes mature in 10 years but have a step-up rate on its fifth year. This means DBP can redeem the notes on the fifth year or else it will have to increase the coupon rate.

Proceeds of the debt issuance will provide working capital to the bank and also increase its capital adequacy ratios.

What is a tier 2 note?

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