BY MAXINE KAMUS
The recent announcement of the Securities Commission’s approval of new PNGX debt market rules for the issuance and listing of corporate bonds will potentially be a game-changer for capital markets in PNG.
Deepak Gupta, Kina Bank’s Executive Managing Director of Business Partners and Wealth, speaking at the PNG Energy Summit in Port Moresby, said Kina Bank welcomes the announcement and believes that this could be a game-changer for capital markets in PNG.
Mr. Gupta said this adds very attractive financing options and that corporate bonds can have a place in the capital structure of most cash-generating companies.
“Any company with the usual positive characteristics of profitability, strong governance and the like can participate and, importantly, it is not necessary to have a primary listing to issue a listing,” he said.
“For insurance, listed clients offer a new way to access capital that is not delusional, which can potentially increase equity returns.”
He said that for secured lenders, companies’ listed debt offers another avenue of funds at risk before secured debt to make projects such as energy projects potentially more bankable.
He said publicly traded bonds offer a new option that enjoys regulatory oversight, with a good yield and appropriate liquidity from market participants.