BPI secures $800M from bond market abroad
Zobel family-led Bank of the Philippine Islands (BPI) has raised $800 million from the offshore bond market—its largest issuance in a single transaction—amid expectations of further monetary policy easing.
In a stock exchange filing on Friday, BPI said it had offered $500-million five-year bonds at a rate of 5 percent per year and $300-million 10-year bonds at 5.625 percent.
Settlement is expected on April 7, according to the Ayala Group’s banking arm.
The notes were issued under BPI’s $3-billion medium-term notes program. Proceeds will be used for refinancing and general corporate purposes, it said.
Both offers consist of Regulation S senior unsecured notes, meaning these were issued outside the United States. While BPI’s notes are unsecured, this will allow investors to have a higher claim in case of bankruptcy.
Most are in Asia
Geographically, 93 percent of the five-year notes were distributed to investors in Asia, while the rest were in Europe, the Middle East and Africa (Emea).
Meanwhile, 82 percent of the 10-year notes were investors in Asia and 18 percent in Emea.
BPI’s issuance comes amid the Bangko Sentral ng Pilipinas’ dovish rate cut stance.
Monetary policy easing typically attracts investors to fixed-income securities, as investors are promised higher yield.
Last year, BPI’s merger with Robinsons Bank resulted in a 20-percent jump in its earnings to a record-high P62 billion.
Revenues swelled by 23 percent to P170.1 billion, while net interest income rose by more than a fifth to P127.6 billion.
Total loans reached P2.3 trillion, up by 18.2 percent, buoyed by the merger.
Without the portfolio acquired from Robinsons Bank, growth would have been at 13 percent.
Its loan book expansion, however, resulted in its nonperforming loan ratio rising to 2.13 percent from 1.84 percent the previous year.
Despite this, BPI president and CEO Jose Teodoro Limcaoco previously said they were expecting a stronger revenue performance this year on optimism over the country’s economic growth.
