spot_img
27.4 C
Philippines
Tuesday, March 19, 2024

Investors swarm on BPI bonds worth P25b

- Advertisement -

Bank of the Philippine Islands, the third-largest lender in terms of assets, has priced its offering of P25 billion worth of fixed rate bonds, representing half of the bank’s planned P50-billion bond and commercial paper program.

BPI said in a statement to the stock exchange Tuesday the 1.25-year fixed rate bonds due March 2020 would pay a coupon of 6.7970 percent yearly and was payable quarterly.

“The coupon represents a spread of 20 basis points over the interpolated 1.25 year BVAL government benchmark rate, and is at the tight end of the spread range of 20 to 40 bps communicated to institutional investors during the institutional book building period,” the bank said.

It said the offering supported the bank’s growth objectives and expansion plans while diversifying its funding sources. ”At the same time, the fixed rate bonds address clients’ need for new investments with shorter tenors compared to long-term negotiable certificates of deposits,” it said.

The offering is BPI’s first following the recent approval of revisions by the Bangko Sentral ng Pilipinas to the rules and regulations relating to the issuances of bonds and commercial paper of banks.

- Advertisement -

Due to the strong response from both retail and institutional investors, BPI closed the offering period one day ahead of schedule on Nov. 19, 2018.

“This decision was based not only on the consolidated order book having reached over ₱38 billion but also on having achieved this at the tightest end of the pricing range. These have allowed BPI to implement a five-fold increase in the issue size of the fixed rate bonds from the initial guidance of ₱5 billion,” it said.

BPI president Cezar Consing said the bank was pleased by the strong response to the peso bond offering, which followed the success of its debut US dollar bond sale earlier this year.

“We are grateful that investors recognize our strong credit metrics and we are happy to meet their needs for innovative fixed income products,” Consing said. The bonds will be issued and listed on Philippine Dealing Exchange on Dec. 6, 2018.

BPI’s board of directors in a meeting on Oct. 17, 2018 approved an initial peso bond issuance of up to P15 billion. But the board later on increased the amount to P25 billion, taking into account the strong demand from investors.

- Advertisement -

LATEST NEWS

Popular Articles