BANK OF THE Philippine Islands (BPI) raised P21.5 billion from its offer of coronavirus disease 2019 (COVID-19) response bonds to be used for lending to micro-, small, and medium-size enterprises (MSME) amid the pandemic.
The amount raised from the lender’s COVID Action Response (CARE) Bonds was more than seven times its target issue size of P3 billion.
“This P21 billion can go a long way in alleviating some of the challenges we see in the MSME sector. The MSME sector account for probably only a little over 10% in loans in the formal financial system and yet they account for about 60% of employment,” BPI President and Chief Executive Officer Cezar P. Consing said at the listing of the bonds at the Philippine Dealing and Exchange Corp. held virtually on Friday.
Mr. Consing said the issuance is also “very large” relative to BPI’s MSME book that it started to expand two years ago.
This issue makes up the third tranche of the bank’s P100-billion bond program. The papers are qualified as social bonds under the ASEAN Social Bonds Standards in the Philippines.
The offer period for the CARE bonds ran from June 22 until July 8, finishing ahead of the scheduled July 17 end date due to oversubscription.
The bonds carry a coupon rate of 3.05% per annum to be paid quarterly in arrears and have a tenor of 1.75 years.
The sole selling agent for the transaction was BPI Capital Corp., with Hongkong Shanghai Banking Corp. (HSBC) as the participating selling agent. Together, BPI Capital and HSBC served as lead arrangers for the bond issuance.
BPI in January raised P15.3 billion from its offering of two-year bonds with a coupon rate of 4.2423% per annum. It returned to the bond market in March and sold P33.9 billion in 1.5-year papers with a rate of 4.05%.
The Ayala-led lender’s net earnings dropped 24.6% year on year to P5.29 billion in the second quarter due to higher loan provisions amid the COVID-19 pandemic.
BPI’s shares closed at P62.55 apiece on Friday, down by P2.95 or 4.50% from its previous finish. — Luz Wendy T. Noble