CHINA BANKING Corp. (China Bank) is offering at least P5 billion via its maiden fixed-rate bond offering to boost funding flexibility.
In a statement sent to reporters on Tuesday, the Sy-led lender said it is currently offering about P5 billion in 1.5-year peso-denominated debt papers. The public offer period started last Monday and will end on June 28.
The one-and-a-half year IOUs carry an interest rate or 5.7% per annum to be paid on a monthly basis until January 2021.
Investors can place a minimum of P100,000 and increments of P50,000 thereafter.
The bonds will be listed on the Philippine Dealing & Exchange Corp. on July 10.
The bond issue marks the first tranche of China Bank’s P75-billion fund-raising program for the next three years which will support its expansion and strategic initiatives.
“We aim to provide retail investors with a good investment opportunity and enhance public participation in the capital markets while increasing our funding flexibility,” China Bank Chief Operating Officer Romeo D. Uyan, Jr. was quoted as saying in the statement.
The lender added that its plan to issue retail bonds and/or commercial papers is also in line with its intention to participate in the country’s economic growth and help fund the government’s infrastructure push.
The Hongkong and Shanghai Banking Corp. Ltd. and Standard Chartered Bank are the joint lead arrangers for the transaction. The foreign banks are also acting as selling agents alongside China Bank, China Bank Capital and Amalgamated Investment Bancorporation.
In a bid to deepen capital markets, the central bank in August simplified the process for lenders to raise fresh funds through bonds, removing the requirement to secure their approval.
China Bank raised P10.25 billion last year from the first tranche of its P20-billion long-term negotiable certificates of deposit program.
The bank booked a P1.9-billion net income in the first quarter, up 24% year-on-year, driven by robust expansion of its core businesses.
China Bank’s shares closed at P26.85 apiece on Tuesday, down five centavos or 0.19% from the previous finish. — K.A.N. Vidal