MANILA, Philippines — Aboitiz-led Union Bank of the Philippines raised P10.5 billion as investors swarmed the first tranche of its P20-billion bond and commercial paper program.
Jose Emmanuel Hilado, chief financial officer and treasurer at UnionBank, said the listed bank was encouraged by the results of its maiden peso bond offering.
The fund raising activity was two times oversubscribed, prompting the Aboitiz-led bank to upsize and more than double the volume from the original P5 billion due to overwhelming investor demand.
“The proceeds of the bonds will help support our strategic business expansion plans, while providing a new shorter dated investment instrument to our institutional and retail clients. We thank our investors for their unwavering confidence in UnionBank,” Hilado said.
The two-year fixed rate bonds, which have a coupon rate of 7.061 percent per annum to be paid quarterly, were priced at 30 basis points over the two-year Bloomberg Valuation service (BVAL) government benchmark rate.
“This is at the lowest end of UnionBank’s indicative pricing guidance of 30 to 50 basis points that the bank communicated during a multi-city roadshow in Manila, Cebu and Davao,” the bank said in a statement.
With the issue size already over twice covered, UnionBank also opted to shorten the public offer period almost a week earlier than expected.
The bonds, to be issued and listed on the platform of the Philippine Dealing and Exchange Corp. on Dec. 7, are the first issuance under a P20 billion multi-tranche bond and commercial paper program.
HSBC and Standard Chartered Bank acted as joint lead arrangers, bookrunners and selling agents.