Security Bank to raise P50 billion via bonds

SECURITY BANK Corp. is set to raise P50 billion via peso-denominated bonds to raise fresh funds.
In a regulatory filing Monday, Security Bank said its board of directors approved at its regular meeting on Dec. 14 the establishment of a local currency bond program of up to P50 billion.
Security Bank said the funds will be used “to diversify the funding sources of the bank and to support future lending activities.”
Banks can now raise fresh funds through corporate bonds with greater ease as new rules do away with having to secure approval from the Bangko Sentral ng Pilipinas as part of its reforms to deepen capital markets.
UnionBank of the Philippines, Bank of the Philippine Islands as well as Metropolitan Bank & Trust Co. recently raised P11 billion, P25 billion and P10 billion through peso fixed-rate securities. Meanwhile, BDO Unibank, Inc. also announced its intention to raise more capital by establishing a P100-billion local currency bond program.
A number of banks have been conducting various fund-raising activities ahead of tighter risk management requirement by the central bank which will take effect next year under the international Basel 3 standards.
In September, Security Bank went to the offshore market to raise $300 million through a senior unsecured note drawdown to expand funding base and extend term liabilities. The issuance marks the maiden tranche of its $1-billion medium term note program.
In April, the lender also raised P5.8 billion through long-term negotiable certificates of time deposit.
Security Bank booked a P2.25-billion net income in the July-September period, up 5% from the same quarter last year, on the back of a surge in consumer loans and deposits. Shares in the bank closed at P160 apiece on Monday, down 20 centavos or 0.12%. — K.A.N. Vidal