THE DEVELOPMENT BANK of the Philippines’ (DBP) planned issuance of dollar-denominated unsecured notes has been given an expected grade of “BBB” by Fitch Ratings.

“We expect a high probability of extraordinary state support for DBP, if needed, due to its strategic policy role, full state ownership, systemic importance as the second-largest state-owned bank in the Philippines with around 5% share of system assets, and the state’s ability to provide support,” Fitch said in a note on Monday.

The debt watcher said the expected rating for the planned issuance may be lowered in case of any significant reduction in the bank’s state ownership, influence and support.

On the other hand, an upgrade in the sovereign rating of the Philippines could lead to higher rating for the debt instruments.

Fitch affirmed its “BBB” rating for the Philippines in May last year, although it downgraded its outlook to stable from positive amid a pandemic-induced recession.

BusinessWorld reached out to DBP for details about the planned issuance but did not receive a response as of press time.

DBP in December raised P21 billion from two-year peso-denominated bonds that carry a coupon rate of 2.5%.

It also served as lead issue manager for the government’s ongoing offering of retail Treasury bonds, together with Land Bank of the Philippines. — LWTN