UNIONBANK of the Philippines has priced its peso-denominated bond offer worth P10.5 billion, which will support its expansion plans.
In a statement to the local bourse on Monday, the Aboitiz-led UnionBank said it has more than doubled the issue size of its maiden peso bond issue to P10.5 billion from the originally announced P5 billion.
The two-year debt notes carry a coupon rate of 7.061% per annum to be paid quarterly.
The offer received “overwhelming” investor demand as the issue size was already over twice covered. This prompted UnionBank to shorten the public offer period almost a week earlier than expected.
The fixed-rate bonds were priced at 30 basis points (bp) over the two-year [PHP Bloomberg Valuation Service] government benchmark rates quoted on Nov. 21.
The rate is at the lowest end of the lender’s indicative guidance of 30-50 bps communicated during the bank’s road show in Manila, Cebu and Davao earlier this month.
The bonds will be issued and listed on the Philippine Dealing & Exchange Corp. on Dec. 7.
The offering marks the first tranche of the bank’s P20-billion bond and commercial paper program approved by UnionBank’s board last Aug. 31.
Jose Emmanuel U. Hilado, UnionBank Chief Financial Officer, said the lender is encouraged by the results of its maiden local currency bond issuance.
“The proceeds of the bonds will help support our strategic business expansion plans, while providing a new shorter dated investment instrument to our institutional and retail clients,” Mr. Hilado was quoted as saying in the statement.
HSBC and Standard Chartered Bank served as the joint lead arrangers and bookrunners of the transaction. The lenders were also the selling agents alongside UnionBank.
Lenders can now raise fresh funds through corporate bonds with greater ease as new rules do away with having to secure approval from the Bangko Sentral ng Pilipinas.
Metropolitan Bank & Trust Co. is looking to raise an additional P5 billion through another tranche of note offering after it raised P10 billion via fixed-rate bonds, part of its P100-billion program announced last month.
Bank of the Philippine Islands also raised P25 billion through peso-denominated papers, marking the first tranche of its P50-billion program.
UnionBank booked a P6.1-billion net profit in the first nine months, lower than the P6.4 billion tallied a year ago, due to increasing interest rates and its inability to issue credit for teachers.
Shares in UnionBank closed unchanged at P 65.90 apiece yesterday. — Karl Angelo N. Vidal