Security Bank completes 2018 fund raising

MANILA, Philippines — Security Bank Corp. may tap the offshore and onshore debt markets next year after successfully raising $300 million from the first tranche of its medium term note program.

Security Bank president and CEO Alfonso Salcedo said the bank has completed its fund raising activity this year as investors swarmed the first tranche of its $1 billion medium term note program.

“Definitely nothing for the rest of the year, next year we haven’t decided yet. If we need more funding sources, we will issue some more,” Salcedo said.

He added the fund raising activity was 3.7 times oversubscribed as orders reached $1.1 billion. Proceeds of the notes would be used to extend term liabilities, expand funding base, improve liquidity gaps, to fund investment and other general corporate purposes.

The offering was distributed to high-quality investors with 55 percent allocated to global fund and asset managers, 20 percent to insurance companies, and the remaining 25 percent to banks and other investors.

Likewise, about 73 percent went to Asian investors while 27 percent were allocated to European investors.

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

Salcedo said Security Bank is also not considering issuing another tranche of long-term negotiable certificates of deposits (LTNCDs) after receiving an approval form the Bangko Sentral ng Pilipinas (BSP) to raise up to P20 billion in October last year.

The bank has so far raised P5.78 billion during the first tranche of the fund raising activity last May to help the bank manage its liabilities and ratios, while also expanding their funding and investor base.

Philippine banks have been diversifying their funding sources by tapping the offshore debt market via medium term note programs. These include Ayala-led Bank of the Philippine Islands with a record $600 million, Yuchengco-led Rizal Commercial Banking Corp. with $450 million in two tranches, Aboitiz-led Union Bank of the Philippines with $500 million, among others.