SEC approves corporate debt vehicle’s registration

THE Securities and Exchange Commission (SEC) approved the application of the first corporate debt vehicle (CDV) in the country — ATRAM Unitized Corporate Debt Vehicle, Inc.

According to the SEC, a CDV is a closed-end investment company that issues securities consisting of either shares of stock or units of participation in such debt vehicle to any number of qualified buyers or non-qualified buyers during a 12-month period.

The number of its buyers should not exceed 19 persons and the CDV’s specific objective is to invest in the corporate debts of large corporations and medium-sized enterprises.

As such, proceeds from the issuance should be invested in bonds, notes, commercial papers, debentures, and other evidence of indebtedness.

Additionally, the SEC said that CDVs are exempt from registration requirements prescribed by Republic Act No. 8799 or the Securities Regulation Code, subject to the commission’s discretion.

ATRAM has confirmed its offering of 50 billion units of participation as an exempt transaction, the SEC said.

In its meeting on Oct. 6, the SEC approved ATRAM’s application subject to the company’s compliance with remaining requirements.

ATRAM will then offer its first unit class, ATRAM Unitized Corporate Debt Fund 1 (ACDF-1), which comprises up to 1 billion units of participation at P1 apiece.

“ACDF-1 shall be primarily offered to qualified buyers under private placements within six months from the commencement date, with a term of two years from the issue date and for a minimum initial investment of P1 million,” SEC said.

ATR Asset Management, Inc. will serve as the company’s fund manager, principal distributor, transfer agent, and service provider.

ATRAM is the first investment company to apply as a CDV. It is intended to support the liquidity needs of large and medium-sized corporations after the pandemic. — Justine Irish D. Tabile