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Friday, March 29, 2024

Security Bank sells P18b in bonds after a huge demand

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Security Bank Corp., the sixth-largest lender in terms of assets, successfully raised P18 billion through the issuance of fixed-rate peso corporate bonds due 2021 in a bid to diversify its funding sources.

The bank said in a disclosure to the stock exchange Friday the bonds had a tenor of two years and settled at the lower end of its pricing range at 5.875 percent annually.

Due to strong demand for the bonds, Security Bank exercised its oversubscription option and accepted offers above the initially announced P5-billion issue size. Minimum denominations were set at P500,000 and increments of P100,000 thereafter.

The bonds were listed Thursday at Philippine Dealing & Exchange Corp. to provide secondary market liquidity to investors who would like to trade the instruments. Security Bank offered the bonds to support lending activities and expand its funding base.

Security Bank executive vice president and treasurer Raul Pedro said the successful issuance and oversubscription was testament to investor confidence in Security Bank and its commitment to provide

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“Over the last few years, Security Bank has made the right moves to provide value to our customers—consistently growing our customer base and winning awards both locally and abroad,” Pedro said.

“This maiden issuance in the peso bond market is meant to diversify our funding sources, creating a path to tap the capital markets again in the near future in order to optimize our funding costs and continue our focus on delivering best in class returns to our shareholders,” he said.

The transaction was a joint effort of Security Bank and sole arranger and book runner Deutsche Bank.

Security Bank remains one of the leading commercial and universal banks in the country.

The bank’s net income in the first quarter rose 1.5 percent year-on-year to P2.38 billion, fueled mainly by sustained strength in loans and deposits.

Total revenues rose 20 percent year-on-year to P7.6 billion. Net interest income from customer loans and deposits, a core revenue component, sustained its healthy trajectory growing by 29 percent to P4.7 billion.

Total loans grew 12 percent year-on-year to P412 billion. Total deposits increased 10 percent to P461 billion. Net interest spread on loans and deposits rose to 4.98 percent in first quarter 2019, up 26 basis points quarter-on-quarter and 78 basis points year-on-year.

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