BPI borrowing from offshore debt market anew
Bank of the Philippine Islands (BPI) will tap the offshore debt market this year as the monetary policy easing cycle attracts more investors toward fixed-income securities.
The banking arm of the Zobel family said in a regulatory filing on Wednesday it was looking at issuing five-year or 10-year fixed-rate debt, or five-year floating rate notes.
Compared to fixed-rate securities, the price of floating rate notes depends on a benchmark interest rate, but issuers have the option to add a few more basis points.
BPI Capital Corp. was tapped as the sole global coordinator, while BofA Securities, HSBC, JP Morgan and UBS will be joint bookrunners.
The upcoming issuance is part of BPI’s $3-billion medium-term note program. Proceeds will be used to repay existing debt and for general corporate purposes.
This comes amid the Bangko Sentral ng Pilipinas’ (BSP) monetary policy easing cycle. Interest rate cuts typically boost appetite for fixed-income securities because issuers can offer higher rates for lenders.
The BSP’s current rate for overnight borrowing is at 5.75 percent.
Last year, an expanded loan portfolio as a result of its recent merger with the Gokongweis’ Robinsons Bank Corp propelled the earnings of BPI by 20 percent to a record-high of P62 billion.
Revenues likewise swelled by 23 percent to P170.1 billion, while net interest income jumped by 22.3 percent to P127.6 billion.
Total loans reached P2.3 trillion, up by 18.2 percent. Without the Robinsons Bank portfolio, growth would have been at 13 percent.
