MOODY’S Investors Service has assigned an investment-grade rating to UnionBank of the Philippines’ (UnionBank) planned US dollar note issuance following the debt watcher’s announcement of the same rating for the lender’s long-term local and foreign currency deposits last week.

In a statement on Tuesday, the credit rater said that it has assigned a Baa2 rating to UnionBank’s proposed dollar-denominated senior unsecured notes under its $1-billion medium-term note (MTN) program. “The rating outlook is stable,” Moody’s said.

“The Baa2 senior debt rating is anchored on UnionBank’s baa3 baseline credit assessment (BCA) and Moody’s expectation of a moderate probability of systemic support from the Philippines government (Baa2 stable),” the debt watcher said.

Last week, Moody’s gave UnionBank long-term local and foreign currency deposit and issuer ratings of Baa2, the same level as the sovereign’s grade, over its above-industry-average of its profitability amid lending growth.

The Aboitiz-led lender announced in early October that the said foreign currency debt papers as part of its fund-raising plan aimed to support its debt management and lending activities.

According to Moody’s, the notes will have a five-year maturity, and will be listed on the Singapore Stock Exchange while the drawdown will be issued out of UnionBank’s head office here.

“The senior debt rating is subject to receipt of final documentation, the terms and conditions of which are not expected to change in any material way from the draft documents reviewed by Moody’s,” the credit rater said.

A medium-term debt program stands as a flexible facility for corporates to issue notes in the foreign currency in the global capital markets, allowing them to tap a bigger avenue for their fund-raising activities.

These debt papers are offered on a continuing basis until such a time when the ceiling amount is reached. — Elijah Joseph C. Tubayan

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