SEC proposes broader bond market access for mid-sized firms - BusinessWorld Online
THE SECURITIES AND EXCHANGE COMMISSION (SEC) has unveiled a proposal aimed at widening the pool of companies that can tap a new mid‑market debt issuance framework. The agency says the move is part of an effort to simplify public bond offerings and make them more efficient for smaller firms.
Expanded Eligibility Criteria
In a second exposure draft released on Aug. 28, the SEC broadened the eligibility thresholds for mid‑market issuers. To qualify, a company must satisfy at least two of three benchmarks: it employs fewer than 200 workers, its total assets do not exceed P500 million, or its paid‑up capital is capped at P200 million. In addition, the issuer must secure a credit rating from an SEC‑accredited rating agency for the securities it registers.
Stakeholder Feedback Overview
The revisions follow a public comment period that began with an initial draft in June. The commission logged 88 responses, carrying forward 73 comments for detailed review. Most participants expressed support for the reforms, noting that the changes could boost the speed and reach of public debt markets. The SEC explained that the adjustments are intended to better pinpoint firms that stand to gain from the mid‑market framework.
Medium‑term Note Framework
Alongside the mid‑market rules, the SEC is fine‑tuning a proposed medium‑term note (MTN) structure. The MTN model would let issuers issue multiple series of debt under a single program that remains open for up to five years. An issuer would launch the program with a base prospectus that outlines the overall terms. The SEC would examine and approve this base prospectus before any individual series could be offered.
Permit‑to‑sell Clarification
The revised draft makes clear that the SEC’s approval of the base prospectus serves as a Permit‑to‑Sell (PTS) for the entire MTN program. This eliminates the need for a separate permit each time a new series is added. After the base prospectus is authorized, the specific terms of each series would be filed with the SEC but would not require another round of commission review before the offering proceeds.
Eligibility for MTN Program
The MTN framework is designed to be inclusive, allowing any registrant—whether a debt‑only issuer, an eligible mid‑market company, or a firm that already has registered equity securities—to participate. In its statement, the SEC noted, “The substantive feedback was largely implementation‑oriented, with stakeholders primarily seeking clarification on the practical application of the proposed amendments rather than the underlying policy frameworks introduced.” The agency’s proposal signals a push toward a more accessible and streamlined bond market for a broader segment of Philippine businesses.
Source: bworldonline.com · 2026-08-30