Bank of the Philippine Islands, the third-largest lender in terms of assets, said it successfully raised $600 million from the debut issuance of five-year senior unsecured fixed rate notes under its $2-billion medium-term note program.
BPI said in a disclosure to the stock exchange the notes fetched a coupon of 4.25 percent. The issuance marked the first in the bank’s 167-year history and the largest-ever debut issuance for a bank in the Philippines.
The issuance was part of the bank’s initiatives to maximize flexibility in accessing offshore funding. The offering came after the successful fixed-income investor calls and roadshow meetings in Hong Kong and Singapore on Aug. 24 and 27, 2018.
“The success of our first-ever issuance of the notes is a reflection of investors’ confidence in the credit strength of BPI,” bank president and chief executive Cezar Consing said in a statement.
“It allows us to diversify our sources of liquidity, lengthen the maturity profile of our borrowings, and manage the growth of our balance sheet more efficiently. We are grateful for the support we have received from a broad range of high-quality investors,” Consing said.
BPI said the offering was about three times oversubscribed, with the order book allocated predominantly to Asia, with the rest to Europe. By investor type, the distribution comprised more than half of the offer allocated to asset managers and fund managers, around one-third to banks and the rest to insurance and pension funds, private banks and other investors.
The transaction is expected to settle on Sept. 4, 2018. The notes will be listed on the Singapore Stock Exchange and are expected to have an issue rating of ‘Baa2’ or investment grade by global debt watcher Moody’s Investors Service.
BPI Capital Corp. acted as the sole global coordinator and, jointly with Deutsche Bank, HSBC and J.P. Morgan, as joint lead managers and joint bookrunners for the drawdown.
BPI remains one of the top universal and commercial banks in the country in terms of assets, loans, and deposits.
BPI’s net income fell 5.7 percent in the first half to P11.03 billion, pulled down partly by lower trading gains. Total revenues of P37.22 billion were driven by strong net interest income of P26.21 billion in the first half, up by 11.5 percent from a year ago.
Interest income from loans grew 21.1 percent year-on-year, driven by a 16-basis-point improvement in loan yields.