MANILA, Philippines — Lucio Tan-led Philippine National Bank (PNB) is raising at least $300 million from the offshore debt market to beef up its capital base and bankroll its expansion program.
In a disclosure to the Philippine Stock Exchange (PSE), the country’s fifth largest bank in terms of asset said its board of directors approved the fund raising program during its meeting yesterday.
PNB said the proposed fund raising activity would be taken out of the bank’s $1 billion Euro medium term note program (EMTN) established in April last year.
The Tan-led bank has an option to upsize the proposed fund raising program depending on the demand.
PNB president and chief executive officer Jose Arnulfo “Wick” Veloso said in a text message to The STAR the bank continues to focus on building up its asset base.
“The proceeds are going to be used to help fund the growth,” Veloso said.
In the onshore debt market, the bank has established a peso bonds and commercial paper program amounting to P100 billion to be issued in one or more tranches.
It successfully raised P13.87 billion via the maiden offering of fixed-rate peso-denominated bonds early this month. The two-year bonds due 2021 was three times oversubscribed as the original volume of the issuance was only P5 billion.
The fund raising activity attracted huge interest from retail investors with around 6,200 individuals participating in the bond offering.
Over the past century, PNB has been very active in offering investment opportunities to customers.
Aside from business expansion, he said the bond issuance is part of the bank’s efforts to diversify its funding sources to meet the financial needs of growing customer base.
“We look forward to tapping the capital markets in a variety of formats, as we come up with new products to offer to our investors, and embark on a safe aggressive growth,” he said.
Last February, PNB raised P8.22 billion via the issuance of long-term negotiable certificates of time deposits (LTNCDs) due 2024 as part of a series of fund raising activities lined up by the bank.
PNB announced last year it would raise P20 billion through the issuance of LTNCDs to extend the maturity profile of the bank’s liabilities as part of overall liability management.