BDO returns to overseas debt market

MANILA, Philippines - BDO Unibank Inc. (BDO) successfully returned to the overseas debt market where it raised $700 million from the issuance of fixed rate senior notes as part of its liability management initiatives.

The issuance is the second drawdown under the $2 billion medium term note program launched by BDO in 2012. Last October, BDO raised $300 million from the issuance of senior notes.

BDO said in a statement the transaction was overwhelmingly oversubscribed with orders reaching $2.2 billion.

“With a wide distribution across Asia Pacific and Europe, this transaction represents the largest single issuance by a Philippine bank to date,” the bank said.

The notes will have a coupon of 2.95 percent and will be issued at a price of 99.909 per 100, with a maturity of five and a half years. Settlement is on Sept. 6.

BofA Merrill Lynch, HSBC and Wells Fargo Securities acted as joint lead managers and joint bookrunners while Mizuho Securities and MUFG acted as co-managers for the transaction.

Proceeds of the issuance of the senior notes would also support BDO’s lending operations and general corporate purposes.

Moody’s Investors Service assigned a Baa2 or a notch above minimum investment grade rating and a stable outlook on the note issuance.

The $2 billion overseas debt facility was launched in August 2012 to boost funds for long-term relending to fund big-ticket infrastructure projects under the government’s public-private partnership (PPP) program.

It was originally launched as the Euro Medium Term Note (EMTN) program – a medium-term foreign currency funding facility that gives flexibility to issue foreign currency-denominated notes in the international capital markets.

These are offered on a continuing basis rather than a one-time deal like a bond issuance, making it easier for BDO to tap offshore capital markets.