BDO raises P35 billion via first tranche of bond program

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BDO UNIBANK, Inc. will issue P35 billion worth of bonds.

BDO Unibank, Inc. raised P35 billion through fixed-rate local currency bonds to support its business expansion and to diversify funding sources.

In a regulatory filing on Monday, the Sy-led bank said it raised P35 billion worth of fixed-rate bonds following a “quick” book-building process.

The fixed-rate notes carry a coupon of 6.42% per annum to be paid quarterly until July 2020, as they will mature in 1.5 years. Interest will be calculated on a 30/360 count basis, the bank said.

The coupon rate also represented a 25-basis-point spread over the Bloomberg PHP Valuation Service benchmark.

The offering marks the first tranche of the bank’s P100-billion bond program announced in August.

“The bond issuance is part of BDO’s efforts to diversify its funding sources and support its business expansion,” the bank said.

The notes, which BDO said is the largest peso bond issuance by a local bank to date, will be issued on Feb. 11 at the Philippine Dealing & Exchange Corp.

Domestic 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.

Metropolitan Bank & Trust Co., Bank of the Philippine Islands, as well as UnionBank of the Philippines, Inc. have recently issued peso-denominated instruments to diversify funding sources and expand their businesses.

Meanwhile, Security Bank Corp. and Philippine National Bank are also looking at offering fixed-rate bonds amounting to P50 billion and P100 billion, respectively, which will likewise be issued in tranches.

In May last year, BDO raised P8.2 billion via 5.5-year long-term negotiable certificates of time deposit to be used for liability management.

BDO booked an P8.4-billion net profit in the third quarter of 2018, 18.6% higher than the P7.08 billion logged the previous year, as its key businesses grew robustly.

BDO shares closed at P138.50 apiece on Monday, dropping P1.50 or 1.07% from the previous day’s finish. — Karl Angelo N. Vidal