BPI MTN gets Baa2 rating

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MOODY’S Investors Service has assigned an investment grade rating on the $2-billion medium-term note (MTN) facility of Bank of the Philippine Islands (BPI).

In a statement on Monday, Moody’s said it has assigned a (P)Baa2 rating to BPI’s dollar-denominated note program, a notch above the minimum investment grade.

The global debt watcher added BPI’s senior unsecured MTN program rating “is in line with the bank’s Baa2 foreign currency deposit rating.”

“The rating is underpinned by BPI’s baa2 baseline credit assessment (BCA) and Moody’s expectation of a very high probability of support for the bank from the government of the Philippines in times of need,” Moody’s added.

Currently, the country is rated Baa2 by Moody’s with a “stable” outlook.

Last Friday, the Ayala-led lender announced it has established an MTN facility to be listed in Singapore. BPI said it tapped the dollar-denominated facility “to maximize flexibility in accessing funding expediently.”

BPI has tapped BPI Capital as sole global coordinator and lead arranger for the program, while Deutsche Bank, HSBC and J.P. Morgan will serve as joint lead arrangers. The arrangers, along with BofA Merrill Lynch, Citigroup, ING, Mizuho Securities, MUFG, Standard Chartered Bank, UBS and Wells Fargo Securities, were appointed as dealers.

Moody’s noted that the baa2 BCA rating of BPI takes into account the bank’s “consistently robust capital and liquidity profiles,” reflecting the “disciplined and prudent” growth of the lender.

BPI’s above-industry-average profitability, presence in corporate and retail markets and asset portfolio’s high credit risk were also factored into the rating.

In April, BPI raised P50 billion through a rights offer, selling 558.7 million common shares at P89.50 per share. Proceeds from the fund-raising activity will be used to finance its digitalization program, expand its retail loan portfolio and put up more branches.

BPI, the third-largest bank in the country in terms of assets, booked a net profit of P6.25 billion in the first quarter, little changed from a year earlier, due to lower trading gains.

Shares in BPI closed at P87.80 each on Monday, down 20 centavos or 0.23% from Friday’s finish. — Karl Angelo N. Vidal