Security Bank borrowing $1 billion overseas

MANILA, Philippines — Listed Security Bank Corp. is tapping the offshore debt market to raise as much as $1 billion under its medium term note program to diversify its funding sources.

Joselito Mape, executive vice president and chief financial officer at Security Bank, said the bank has mandated Citigroup, CLSA, MUFG, and UBS as joint lead arrangers for the program.

“With the establishment of the program, Security Bank will gain the flexibility to tap the international debt capital markets, subject to market conditions,” Mape told the Philippine Stock Exchange (PSE).

He said the program is expected to be listed on the Singapore Stock Exchange.

Moody’s Investors Service has assigned a Baa2 rating, a notch above minimum investment grade, a stable outlook on the $1 billion medium term note program.

The debt watcher said the ratings are underpinned by Security Bank’s Baa3 baseline credit assessment (BCA) and incorporates one notch of uplift to reflect Moody’s expectation of a moderate probability of support for the bank from the Philippine government, rated Baa2, stable, in times of need.

“Security Bank’s Baa3 BCA is underpinned by the bank’s above-industry-average asset quality and strong capital buffers, boosted by a capital infusion from its new strategic partner, MUFG Bank Ltd,” Moody’s said

It added the rating also took into account the expectation that the bank’s asset quality and capital profile would moderate over time because of its higher-than-industry growth plans following the capital infusion.

MUFG infused P37 billion in April 2016 in exchange for a 20 percent stake in Security Bank.

Total resources of Security Bank stood at P722 billion as of end-June.

Last October, the Bangko Sentral ng Pilipinas (BSP) gave Security Bank the green light to issue up to P20 billion worth of long term negotiable certificates of deposits (LTNCDs) in one or more tranches.