BDO UNIBANK, Inc. (BDO) and Metropolitan Bank & Trust Co. (Metrobank) are offering 5.5-year dollar-denominated bonds to raise funds for business purposes and to refinance liabilities, the banks said in separate disclosures on Monday.
BDO is offering at least $500 million in 5.5-year fixed-rate dollar-denominated notes, the proceeds of which will be used for general business purposes.
The bank said the size of the offer will be based on the US dollar benchmark, which means at least $500 million.
The notes will carry a fixed coupon, with an initial price guidance of T+235 basis points (bps).
The Sy-led bank said the notes are part of its $5-billion euro medium-term note program.
The lender has tapped Standard Chartered Bank to act as the global coordinator of the offering. Standard Chartered Bank (B&D), BofA Securities, Inc., meanwhile, will serve as joint lead managers and joint bookrunners.
The notes will be listed on Singapore Exchange Securities Trading Ltd.
BDO last week raised P36 billion in 1.75-year fixed-rate bonds, upsized from its initial P5-billion offer due to strong demand.
In January, the lender raised P40.1 billion via 2.5-year bonds carrying a 4.408% rate per annum.
BDO’s net income declined by 10.2% from a year ago to P8.8 billion in the first quarter as weak markets hit the bank’s investment portfolio.
Its shares slipped by 2.46% on Monday, shedding P2.45 to close at P97.50 apiece versus its P100 finish on Friday.
Meanwhile, Metrobank is looking to offer 5.5-year dollar-denominated unsecured notes to refinance its existing debt.
The Ty-led lender said the offering will be a Regulation-S only 5.5-year dollar-denominated senior unsecured notes and will be subject to market conditions.
“This is the bank’s first issuance of foreign currency senior debt in recent history, under the $2 billion Medium Term Notes (MTN) Programme,” Metrobank said via text message.
“Please expect more details as we firm up the plans for the offering,” it added.
The bank said UBS and First Metro Investment Corp. will serve as the joint global coordinators and joint bookrunners for the offering.
Meanwhile, it said the joint lead managers are Mitsubishi UFJ Financial Group, Inc. (MUFG) and SMBC Nikko Capital Markets Ltd.
“Proceeds will be used to refinance existing indebtedness,” the bank stated in the disclosure.
Moody’s Investors Service yesterday assigned (P)Baa2 long-term foreign and local currency senior unsecured ratings to the long-term senior unsecured component of Metrobank’s $2-billion MTN program.
“The (P)Baa2 ratings assigned to the senior unsecured component of the MTN program are in line with MBT’s Baa2 foreign and local currency deposit ratings, and reflect the bank’s baa2 baseline credit assessment (BCA) and
Moody’s expectation of a very high probability of support from the Government of the Philippines (Baa2 stable) in times of need,” Moody’s said. “The ratings do not receive an uplift because the bank’s baa2 BCA is already at the same level as the sovereign rating.”
Moody’s said Metrobank’s BCA reflects its healthy asset quality, stable profitability supported by low-cost deposits, high capital levels, and strong funding and liquidity.
“Asset risk for MBT is rising because of the coronavirus outbreak, but Moody’s expects its asset quality to remain robust, underpinned by a loan composition that is weighted toward financially sound corporates. Profitability pressures because of slower loan growth and higher credit costs will be somewhat offset by its resilient net interest margin,” the debt watcher said.
Metrobank’s latest issuance marks the second time it is tapping the capital market this year following an offering last month.
The bank raised P10.5 billion in 1.25-year peso-denominated notes in June, marking the sixth issuance out of its P100-billion bond and commercial program.
The notes carry an interest rate of three percent per annum.
Metrobank’s net income declined by 9.33% to P6.1 billion in the first quarter as it increased loan loss provisions due to the pandemic.
Its gross operating revenue rose 13% to P27.6 billion.
Shares in Metrobank closed at P37.9 apiece on Monday, down by P1.05 or 2.7% from Friday’s close of P38.95 each. — B.M. Laforga