UNIONBANK of the Philippines, Inc. has raised P6.8 billion from its sale of debt notes eligible as Tier 2 notes, marking the first issue out of its P20-billion program, according to a stock filing on Wednesday.
UnionBank Treasurer and Chief Financial Officer Jose Emmanuel U. Hilado said in an e-mail that the bank accepted all orders worth P6.8 billion, upsizing the issuance from the initial offer of P5 billion, with the bank looking to refinance the P7.2 billion worth of Tier 2 notes it redeemed last week.
UnionBank said the notes have a tenor of 10 years and three months, callable in 5.25 years or starting May 24, 2025.
It said the Tier 2 notes carry an interest rate of 5.25% per annum, payable in arrears quarterly, and will mature on May 24, 2030.
The notes were listed on Monday, Feb. 24, on the Philippine Dealing and Exchange Corp. (PDEx).
Hongkong and Shanghai Banking Corp. and Standard Chartered Bank served as the joint lead arrangers and bookrunners for the transaction, along with UnionBank who also acted as the limited selling agent. Meanwhile, Asia United Bank Corp. served as a market-maker.
The offer marked the first tranche of Aboitiz-led bank’s P20-billion note program meant as a replacement for the Tier 2 notes it redeemed. The program was approved by the Bangko Sentral ng Pilipinas last December.
Mr. Hilado said they have yet to decide when the bank will offer the next tranches of the program.
UnionBank on Feb. 20 redeemed P7.2 billion worth of unsecured subordinated notes qualifying as Tier 2 capital, ahead of Feb. 25, 2025 maturity of the instruments.
It said it got the central bank’s approval to exercise its call option on the notes by way of voluntary redemption.
The Tier 2 notes were issued in November 2014 with an interest rate of 5.375%.
UnionBank booked a P14-billion net income in 2019, nearly double the P7.3 billion it earned the year prior amid a higher loan portfolio, margin recovery and strong gains from its trading activities.
The bank’s shares inched up by ten centavos or 0.17% on Wednesday to close at P57.60 each, against Monday’s close of P57.50. — Beatrice M. Laforga