State-owned Development Bank of the Philippines raised P3.875 billion in fresh funds from its latest local bond issuance which would be channeled to various developmental projects and initiatives for its key priority sectors, a top executive said Thursday.
DBP president and chief executive Michael de Jesus said the bank’s 1.5-year fixed rate series 4 bond issuance reached more than 3.6 times the announced minimum issue size of P2 billion for the series 4 bonds, which culminates its four-year P55-billion sustainable bond program.
“Notwithstanding the volatile market backdrop, we are buoyed by the strong support from institutional investors, which allowed us to price at our tightest ever spread of 10 basis points over the relevant benchmark,” de Jesus said.
“The overwhelming reception of DBP’s issuance resulted in closing the offering period earlier than expected,” he said.
DBP is the eighth largest bank in the country in terms of assets and provides credit support to four strategic sectors of the economy – infrastructure and logistics; micro, small and medium enterprises; environment; social services and community development.
Prior to the latest issuance, DBP issued two bond offerings—an offshore bond that raised $300 million in 2021 which was rated “BBB” by Fitch Ratings, and an onshore bond offering in 2022 that fetched P12-billion via private placement.
The latest bonds were offered at par value with an interest rate of 6.4126 percent per annum with a 1.5-year tenor, which is set to mature in January 2025. They were enrolled and traded through the Philippine Dealing & Exchange Corporation.
De Jesus said part of the proceeds would be used to augment future loan growth pipeline, balance sheet expansion and provide diversification of funding sources amid rising demand from its clients in the wake of the country’s rapid economic recovery and expansion.
He said the distribution of the series 4 bonds was undertaken via private placement, with participation limited to qualified institutional buyers, similar to what the bank adopted in 2022.
“DBP’s latest bond is a tangible manifestation of the Bank’s proactive stance to offer investors with an opportunity to be part of the noble goal of supporting efforts to stimulate the economy and actively contribute to the country’s steady recovery,” de Jesus said
DBP tapped Standard Chartered Bank as issue manager together with China Bank Capital as joint lead arrangers and bookrunners.