UNION BANK of the Philippines, Inc. said it received approval from the Bangko Sentral ng Pilipinas (BSP) to issue up to P20 billion worth of notes.

The issue is intended to replace P7.2 billion worth of notes due 2025, which it plans to pre-terminate.

UnionBank Assistant Corporate Secretary Maria Eliza Camille B. Yamamoto-Santos said in filings with the Securities and Exchange Commission, The Philippine Stock Exchange, Inc. and the Philippine Dealing and Exchange Corp. that the P20 billion worth of unsecured subordinated debt is considered as Tier 2 Capital under the Basel 3 framework.

In August, the bank said in a filing that it was planning to exercise a call option to redeem the P7.2 billion in unsecured subordinated debt eligible as Tier 2 capital.

The P7.2 billion worth of debt was issued in November 2014 at a coupon of 5.375%, callable starting Feb. 20, 2020.

The bank’s net profit hit P8.5 billion in the first nine months of 2019, up 40% year-on-year.

UnionBank ended trading Friday at P57.80, down 0.34%. — Luz Wendy T. Noble