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China Bank raising P5b from maiden bond issue

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China Banking Corp., the seventh-largest lender in terms of assets, plans to raise at least P5 billion through its maiden issuance of peso-denominated fixed rate bonds to support expansion and strategic initiatives.

The bank said in a statement to the stock exchange Thursday the public offer period started June 10 to 28, 2019. The China Bank bonds carry an annual interest rate of 5.70 percent which will be paid on a monthly basis.

The minimum investment is P100,000, with additional placements in increments of P50,000. The bonds have a tenor of 18 months, maturing in January 2021.

“We aim to provide retail investors with a good investment opportunity and enhance public participation in the capital markets while increasing our funding flexibility,” said China Bank chief operating officer Romeo Uyan Jr.

HSBC and Standard Chartered Bank are the joint lead arrangers of transaction, while the selling agents are China Bank, China Bank Capital, Amalgamated Investment Bancorporation, HSBC and Standard Chartered Bank.

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Uyan said the bond issue was part of China Bank’s planned P75-billion fund raising program over the next three years to support expansion.

China Bank’s plan to issue retail bonds or commercial papers is in line with its intention to be an active participant in the ongoing economic expansion of the country and the government’s infrastructure initiatives.

China Bank last year raised P10.25 billion through a public offering of peso-denominated long-term negotiable certificates of time deposits. The China Bank Bonds will be listed on the Philippine Dealing & Exchange platform on July 10, 2019.

The bank posted a 24-percent increase in net income to P1.9 billion in the first quarter 2019, driven by the robust growth of core businesses.

The January-to-March performance translated into a return on equity of 8.42 percent and return on assets of 0.86 percent.

Net interest income in the first quarter grew 12 percent to P5.9 billion, boosted by the 41-percent jump in interest revenues from loans. 

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