Bank of the Philippine Islands, the third-largest lender in terms of assets, is putting up a peso bond and commercial paper program to raise P50 billion for general corporate purposes.
BPI said in a statement to the stock exchange Thursday its board of directors approved the planned issuance in a meeting Wednesday.
“The board of directors of the Bank of the Philippine Islands approved the establishment of a peso bond and commercial paper program in the aggregate amount of up to P50 billion,” BPI said.
The bond program follows BPI’s successful $600-million debut issuance last month of five-year senior unsecured fixed rate notes under its $2-billion medium-term note program.
The notes fetched a coupon of 4.25 percent. The issuance marked the first in the bank’s 167-year history and the largest-ever debut issuance for a bank in the Philippines.
The issuance was part of the bank’s initiatives to maximize flexibility in accessing offshore funding. The offering came after the successful fixed-income investor calls and roadshow meetings in Hong Kong and Singapore on Aug. 24 and 27, 2018.
BPI president Cezar Consing said the capital-raising initiative allowed the bank to diversify its sources of liquidity, lengthen the maturity profile of borrowings and manage the growth of its balance sheet more efficiently.
The offering was about three times oversubscribed, with the order book allocated predominantly to Asia, with the rest to Europe. By investor type, the distribution comprised more than half of the offer allocated to asset managers and fund managers, around a third to banks and the rest to insurance and pension funds, private banks and other investors.
BPI’s net profit fell 5.7 percent in the first six month to P11.03 billion, pulled down by lower trading gains and higher expenses for digital technologies.
Total revenues hit P37.22 billion, as net interest income grew 11.5 percent to P26.21 billion. Asset base expanded 9.3 percent, while the net interest margin improved 8 basis points.