BDO takes record $500-M syndicated loan

MANILA, Philippines - BDO Unibank Inc. has tapped the offshore debt market for a $500- million loan – considered the largest syndicated loan transaction by a Philippine financial institution to-date.

The Sy-led bank decided to upsize the three-year syndicated term loan facility to $500 million from the initial tranche of $350 million due to strong interest from various foreign institutions.

The fund raising activity was oversubscribed after commitments were received from various lenders in the US, Europe, Asia, and the Middle East.

Bank of America N.A., Deutsche Bank AG, Hong Kong and Shanghai Banking Corp. (HSBC) Ltd; Mizuho Bank Ltd., Standard Chartered Bank, and United Overseas Bank Ltd. served as lead arrangers and book runners.

BDO will use the proceeds to refinance an existing term loan as well as for general banking and corporate purposes.

Earnings of the country’s largest lender went up 5.9 percent to P11.7 billion in the first half of the year on the back of steady growth in its core lending business.

The bank reported a 10 percent rise in net interest income, while income from fee-based services and treasury activities grew 14 percent from January to June this year.

BDO reported a 16 percent increase in its customer loan portfolio to P1.1 trillion. It also managed to keep the increase in its operating expenses at 10 percent in the first half of the year.

The bank’s asset quality showed sustained improvement with a gross non-performing loan (NPL) ratio of 1.2 percent compared to a year-ago level of 1.6 percent.

It set aside provisions of P2.1 billion leading to a higher NPL coverage of 198 percent as of end June this year from 174 percent in end June last year.

BDO maintained a solid capital base of P181 billion, translating to a capital adequacy ratio (CAR) of 13.6 percent and common equity tier 1 (CET1) ratio of 11.5 percent.

BDO remains the largest bank in terms of total assets, loans, deposits, and trust funds under management. It has 899 operating branches and over 2,700 ATMs nationwide.

It also has a branch in Hong Kong as well as 27 overseas remittance and representative offices in Asia, Europe, North America, and the Middle East.