BANK OF THE Philippine Islands (BPI) raised $600 million through a senior unsecured note drawdown to maximize flexibility in offshore funding and diversify its liquidity sources.
In a disclosure to the stock exchange on Wednesday, the Ayala-led lender said it raised $600 million from its five-year senior unsecured fixed rate S notes which fetched a coupon of 4.25%.
The capital raising activity marked the maiden drawdown from its $2-billion medium-term note program established in June and the debut offshore bond offering of the lender.
“The bank will issue the notes as part of its initiatives to maximize flexibility in accessing offshore funding,” BPI said in the statement.
The transaction is expected to settle on Sept. 4 and will be listed on the Singapore Stock Exchange.
The notes are expected to have an issue rating of “Baa2” by debt watcher Moody’s Investors Service, a notch above the minimum investment grade.
The offering was about three times oversubscribed with the order book allocated primarily to Asia with the rest to Europe, the bank said.
By investor type, more than half of the offer was allocated to asset and fund managers, around one-third to banks and the rest to insurers, pension funds, private banks and other investors, BPI added.
BPI President and Chief Executive Officer Cezar P. Consing said the success of its first issuance of notes offshore reflects investors’ confidence in the credit strength of BPI.
“It allows us to diversify our sources of liquidity, lengthen the maturity profile of our borrowings, and manage the growth of our balance sheet more efficiently,” Mr. Consing was quoted as saying in the statement.
BPI Capital Corp. acted as the sole global coordinator of the drawdown, joined by Deutsche Bank, HSBC and J.P. Morgan as joint lead managers and joint bookrunners.
The offshore bond offering came after the fixed income investor calls and roadshow meetings conducted by BPI in Hong Kong and Singapore on Aug. 24 and 27.
In April, BPI raised P50 billion through a stock rights offer, selling 558.7 million common shares priced at P89.50 apiece to expand its retail loan portfolio and beef up its digital thrust and branch expansion.
BPI’s net income in the first half declined 5.7% to P11.03 billion from the P11.7 billion tallied year-on-year.
BPI shares dropped 55 centavos or 0.59% to P93 each on Wednesday. — Karl Angelo N. Vidal