China Bank raises P20 billion from bonds

MANILA, Philippines — China Banking Corp. raised P20 billion after returning to the domestic debt market through the issuance of three-year peso bonds to bankroll the bank’s strategic initiatives and expansion programs.

The fund-raising activity was four times oversubscribed from the original offer of P5 billion on the back of overwhelming demand from individual and institutional investors.

China Bank president William Whang said the strong demand underscores the investing public’s sustained confidence in the bank amid these challenging times.

“This successful issuance represents a strong start of the year for China Bank. We would like to extend our gratitude to our investors, customers, and everyone involved in this transaction for their continued trust in us,” Whang said.

China Bank is the first financial institution to tap the domestic debt market this year as the industry reels from the impact of the COVID-19 pandemic.

The fixed-rate bonds are due in 2024 and carry an interest rate of 2.50 percent per annum, payable monthly.

China Bank Capital Corp. acted as issue coordinator, structuring advisor, joint lead arranger and joint bookrunner, while Philippine Commercial Capital Inc. and HSBC served as the joint lead arrangers, joint bookrunners, and selling agents.

The bank launched a P45 billion bond and commercial paper program in September last year.

It successfully raised P15 billion through the issuance of two-year bonds in October last year.

Earnings of China Bank increased by 23 percent to P8.2 billion from January to September last year compared to P6.7 billion in the same period in 2019 despite higher provisioning for soured loans in anticipation of more defaults from borrowers due to the impact of the pandemic.

The bank’s NPL rose to 2.5 percent during the nine-month period last year from 1.4 percent as the bank earmarked P6.3 billion for probable credit losses or 12 times the provisioning made in the same period in 2019.

China Bank provides a full range of banking products and services to corporate, commercial, and retail customers through 634 branches and 1,022 ATMs, including the 158 branches and 164 ATMs of China Bank Savings.