BDO Unibank raises P35 billion in biggest peso bond issue

BDO Unibank Inc., the country’s largest lender in terms of assets controlled by the Sy family, raised P35 billion in what is considered the largest peso bond issuance by a Philippine bank.

BDO said proceeds from the bond issuance aimed to diversify its funding sources and support business expansion. The issuance of fixed-rate bonds followed a quick book-building process. 

“The bonds have a tenor of 1.5 years and bear a coupon rate of 6.42 percent, representing a 25 bps [basis points] spread over the Bloomberg Valuation Service or BVAL benchmark. Interest will be paid quarterly, calculated on a 30/360 count basis. The bonds will be issued on Feb. 11, 2019,” it said.

“The bond issuance is part of BDO’s efforts to diversify its funding sources and support its business expansion, and is a component of an approved P100-billion bond program announced in August last year,” BDO said.

BDO said the issuance marked another significant milestone as it represented the largest-ever single peso bond issuance by a Philippine bank.

It followed the bank’s $150-million Green Bond in 2018, its $1.2-billion stock rights offering in 2017 and its $700-million senior note issuance also in 2017, which was considered the largest Reg S dollar issuance by a Philippine bank.

Standard Chartered Bank acted as the sole arranger and bookrunner for the latest issue, while BDO Capital & Investment Corp., BDO Private Bank Inc., and BDO Unibank Inc. served as the selling agents.

BDO is a full-service universal bank which provides a wide range of corporate and retail banking services. These services include traditional loan and deposit products, as well as treasury, trust and wealth advisory, investment banking, private banking, rural banking, cash management, leasing and finance, remittance, credit card services and insurance and stock brokerage services.  

BDO has one of the largest distribution networks, with more than 1,200 operating branches and over 4,000 ATMs nationwide.  It also has full-service branches in Hong Kong and Singapore as well as 23 overseas remittance and representative offices in Asia, Europe, North America, and the Middle East.

BDO ranked as the largest bank in terms of total assets, loans, deposits and trust funds under management based on published statements of condition as of Sept. 30, 2018.

BDO’s net income climbed 18 percent in the third quarter of 2018 to P8.4 billion from a year ago, on solid expansion of core lending and deposit-taking, life insurance, and fee-based businesses.

Total profit in the first nine months hit P21.5 billion, up 6 percent from the same period last year.

BDO said excluding the results of BDO Life, which was impacted by PFRS9’s mark to market on its investment portfolio and One Network Bank’s ongoing investment in the micro-SME lending business, net income would have registered a 13-percent growth in January to September.

The bank said lending operations posted a 17-percent increase in gross customer loans to almost P2 trillion, led by the middle-market and consumer segments.

Asset growth was funded by the 12-percent increase in total deposits to P2.3 trillion, with low-cost Casa ratio steady at 70 percent.

Topics: BDO Unibank Inc. , Bloomberg Valuation Service , One Network Bank
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