PHILIPPINE National Bank, the fifth-largest lender in terms of assets and controlled by tobacco and airline tycoon Lucio Tan, plans to borrow $1 billion under a debt program.
“Pursuant to the program, PNB may from time to time issue, offer, or sell notes in the aggregate amount of up to one billion US dollars or its equivalent in other currencies, in such amount, tenor, number of tranches, and under such other terms and conditions as the bank may subsequently approve,” PNB disclosed to the stock exchange.
“The bank shall duly disclose to the exchange the terms and conditions of any such issuance at the appropriate time,” it said.
PNB tapped Citigroup Global Markets Ltd., MUFG Securities EMEA Plc, Standard Chartered Bank and Wells Fargo Securities, LLC as lead arrangers and dealers for the program.
PNB also secured an approval-in-principle from the Singapore Stock Exchange for listing of the program and notes to be issued on the SGX.
PNB said it was set to submit to the Singapore Stock Exchange Friday the offering circular in relation to the program.
Global debt watchdog Moody’s Investors Service also on Friday assigned an investment grade rating of Baa2 to PNB’s $1 billion medium-term note program.
“The (P)Baa2 senior unsecured MTN program rating is underpinned by PNB’s baa3 baseline credit assessment (BCA) and a one-notch uplift to reflect Moody’s assumption that the bank will receive support from the Government of the Philippines in times of need,” Moody’s said.
Moody’s said PNB’s baseline credit assessment of baa3 was also supported by its relatively stable funding profile when compared with other banks in the Philippines, with limited depositor concentration versus the same peers.
“PNB’s BCA also reflects the bank’s stable asset quality profile and high
levels of capitalization and loan-loss coverage. These factors provide
sufficient loss-absorption capacity at its current rating level to
withstand moderate asset quality deterioration over the next 12-18 months,” Moody’s said.
Moody’s expects PNB’s interest income will improve, as the bank expands loans to the higher-yielding small and medium enterprises and retail segments.