BPI board approves expanded first bond tranche of P25 billion

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BANK of the Philippine Islands (BPI) is planning to issue the first tranche of its P50-billion peso bond and commercial paper program amounting to P25 billion.

In a regulatory filing Friday, the Ayala-led bank said its board increased the approved maximum size of the initial bond issuance to P25 billion from the P15 billion announced last Oct. 17.

In a Sept. 20 disclosure, the bank announced it is establishing a peso-denominated bond and commercial paper program of up to P50 billion as approved by its board.

Lenders 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.

Last week, Metropolitan Bank & Trust Co. (Metrobank) raised P10 billion via fixed-rate bonds, part of its P100-billion bond and commercial paper program announced last month.

This was the first ever bond issue by a bank since the central bank liberalized rules on their fundraising activities.

BDO Unibank, Inc., Philippine National Bank as well as UnionBank of the Philippines have also set up their own peso bond programs of up to P100 billion, P20 billion and P20 billion, respectively.

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 May, BPI completed a P50-billion rights offer, with the proveeds funding its business operations and expansion.

The bank also raised $600 million in August through a drawdown from its $2-billion medium-term note program, the largest issuance by a bank in the offshore debt market.

BPI reported a P5.98-billion net profit in the third quarter on the back of the double-digit expansion in net interest income.

BPI shares were up 5.21% at P88.90 on Thursday. — Karl Angelo N. Vidal