Unionbank cops P16B from latest bond offer
To support its expansion plans, Union Bank of the Philippines said it has raised P16 billion from its most recent foray into the domestic bond market.
In a stock exchange disclosure on Wednesday, the Aboitiz-led bank said it had raised P9.25 billion from its 1.5-year Series H bonds at 5.88 percent per annum. It also raised P6.75 billion from three-year Series I bonds at a rate of 6.02 percent.
According to UnionBank, it saw “strong interest” from institutional and retail investors, resulting in both tranches exceeding their base targets of P5 billion each.
“Proceeds from the issuance shall be used to extend term liabilities, expand funding base, support business expansion plans and for other general corporate purposes,” UnionBank said in its filing.
The bonds will be listed on the Philippine Dealing and Exchange Corp. today, June 26.
UnionBank’s issuance is part of its bond program originally approved in 2019. From P39 billion, the amount was increased to P100 billion last month.
ING Bank NV Manila Branch, Philippine Commercial Capital Inc. and Standard Chartered Bank were the joint lead arrangers and book runners for the transaction.
UnionBank’s bond offer comes in the midst of Bangko Sentral ng Pilipinas’ (BSP) monetary policy easing cycle. So far, the BSP has slashed the benchmark rate for overnight borrowing by a total of 50 basis points this year to 5.25 percent.
Rate cuts make bonds more attractive to investors as these offer higher yields.
The country’s ninth-largest bank also plans to raise up to $800 million from the offshore debt market amid plans to boost the coffers of its digital banking arm.
This is part of UnionBank’s $2-billion euro medium-term note program approved in October 2020.
