BDO, Security Bank raising P5B each through bond sale
Two banks have tapped the debt market to help diversify funding sources and support sustainability-related projects amid prospects of upcoming interest rate cuts due to easing inflation.
Sy family-led BDO Unibank Inc. launched its P5-billion bond offer on Monday. The bonds will have a tenor of one and a half years, promising a yield of 6.325 percent per annum, BDO said in a filing.
The minimum amount for sale is P500,000. Investors have the option to add increments of P100,000.
According to the country’s largest bank, proceeds from the issuance will be used to fund “eligible assets” indicated in BDO’s Sustainable Finance Framework, including development of renewable energy power plants and financial aid for micro, small and medium enterprises.
BDO will offer the bonds until July 19, while listing on the Philippine Dealing and Exchange Corp. is scheduled on July 24.
This is BDO’s third peso-denominated Asean sustainability bond issuance. The banking arm of the SM Group offered P52.7 billion in January 2022 and P63.3 billion in January this year.
Security Bank Corp. of tycoon Frederick Dy likewise launched its P5-billion retail bond offering on Monday. The offer period will run until Aug. 13, with listing scheduled on Aug. 20.
The bonds, which will mature in five years and one month, have a fixed rate of 5.7 percent per annum. A minimum investment of P100,000 was set, with an option to add increments of P10,000 thereafter.
In a separate disclosure, Security Bank said the issuance was part of its P200-billion peso bond and commercial paper program.
“We’re excited about this peso bond offering, which will support our strategic initiatives and diversify our funding sources,” said Arnold Bengco, executive vice president and head of financial markets at Security Bank.
The bank noted that proceeds would be used to support its lending activities.
It had planned to “nearly double” its loan book by the end of next year amid growing interest in renewable energy development.
Bonds have become popular among investors in recent years as they promised better yields. The offers come ahead of a possible policy rate cut in August, which could result in higher bond yields.
