UNIONBANK of the Philippines raised P5.8 billion via three-year bonds.

UNIONBANK of the Philippines, Inc. listed P5.8 billion in three-year fixed-rate bonds, which will support its expansion and lengthen its debt maturity profile.

The Aboitiz-led lender issued P5.8 billion in peso-denominated bonds at the ceremonial listing on Monday at the Philippine Dealing & Exchange Corp. (PDEx) in Makati City.

The three-year debt papers carry a coupon of six percent per annum to be paid quarterly until May 2022.

The bank opted to upsize the issuance from the P3 billion it initially wanted to raise after receiving strong demand from institutional and retail clients.

“The main purpose of this really is to lengthen the maturity profile of the liabilities so that we can reduce the gap between the tenor of the loans and the deposits,” UnionBank President and Chief Executive Officer Edwin R. Bautista told reporters following the bell ringing ceremony.

“So it does two things: it gives us more money to lend and at the same time the sourcing of funds, the tenor is also lengthened.”

The Hongkong and Shanghai Banking Corp. and ING Bank N.V. served as the joint lead arrangers and bookrunners of the transaction. The global banks also acted as selling agents alongside UnionBank.

The issuance brings the bank’s total issuance to P16.8 billion, after it raised P11 billion via its maiden bond offering last December with a coupon rate of 7.061% per annum.

UnionBank is programmed to raise fresh funds via fixed-rate bonds amounting to P30 billion.

The lender’s listing brings the total volume of new listings at the PDEx this year to P154.49 billion. Overall, the total amount of outstanding securities listed at the bourse stood at P1.166 trillion, floated by 49 companies.

UnionBank Treasurer and Senior Executive Vice President Jose Emmanuel U. Hilado, in his speech yesterday, hinted at the bank’s return to the offshore bond market, saying the bond’s working team is “simultaneously working on another deal on the dollar side.”

Asked for more details, Mr. Bautista said the dollar-denominated debt note issuance is “highly possible” within the year.

“It depends on how fast can we deploy the funds… As we make more money, our ability to increase our asset book also grows. We should leverage on that,” he said.

In November 2017, UnionBank raised $500 million from the offshore issuance of fixed-rate senior notes under its medium-term note program programmed at $1 billion. Proceeds of the fund-raising activity will be used to refinance existing liabilities, expand funding base and for other general corporate purposes.

UnionBank posted a P2.16-billion net income in the first three months, down 26% from P2.93 billion recorded in the same quarter in 2018.

The bank’s shares closed at P60 apiece on Monday, gaining 20 centavos or 0.33%. — K.A.N. Vidal