Bank of the Philippine Islands, the third-largest lender in terms of assets, said Friday it raised P21.5 billion from the sale of COVID Action Response Bonds as subscriptions reached seven times the initial planned issue size of P3 billion.
BPI said in a statement the oversubscription triggered an expedited offer period closing for the country’s first COVID response bonds.
The CARE Bonds, which were issued and listed Friday at the Philippine Dealing & Exchange Corp., have a tenor of 1.75 years and an interest rate of 3.05 percent per annum and paid quarterly in arrear.
Proceeds of the CARE Bonds will be used by the bank to finance and refinance eligible micro, small and medium enterprises, one of the sectors hardest hit by COVID-19, under BPI’s Sustainable Funding Framework.
“We issued the CARE Bonds to address the financing needs of MSMEs, as they work to overcome the challenges brought about by COVID-19. The amount raised adds to our capability to provide financing to this very important segment of the economy,” BPI president and chief executive Cezar Consing said.
The bank said the overwhelming reception of investors to the CARE Bonds highlighted the potential of the social bond market, which the Securities and Exchange Commission put forward as a funding source for projects to address the devastating impact of the global health crisis.
The SEC in July encouraged issuers to explore the social bond market to help the country recover from the pandemic and confirmed that the BPI CARE Bonds qualified as social bonds under the ASEAN Social Bonds Standards.
BPI Capital Corp. and the Hongkong and Shanghai Banking Corp. are the joint lead arrangers of the CARE Bonds. BPI Capital is sole selling agent, while HSBC is participating selling agent.
BPI’s net profit fell 15 percent in the first half to P11.68 billion from P13.74 billion a year ago as it allotted higher provisions for loan losses amid the onslaught of the COVID-19 pandemic.