BDO eyes P5 billion from peso sustainability bonds

MANILA, Philippines — Sy-led BDO Unibank Inc. is eyeing at least P5 billion as it returns to the domestic debt market via the maiden issuance of peso-denominated sustainable bonds next month.

In a disclosure to the Philippine Stock Exchange (PSE), the country’s largest lender said proceeds from the third tranche of its P365-billion bond program would be used to diversify the bank’s funding sources, as well as finance and refinance eligible assets as defined in its sustainable finance framework.

“This is the first time that the bank will be issuing a peso-denominated sustainability bond to both institutional and retail investors,” BDO said in a statement.

Standard Chartered Bank was tapped as the sole arranger, while BDO Unibank, BDO Private Bank, and Standard Chartered Bank will be the selling agents of the fund raising activity. BDO Capital & Investment Corp. is the financial advisor.

The offer period of the two-year bonds will start from Jan. 10 to 21 and the listing date is on Jan. 28, 2022.

“The bank reserves the right to update the terms and the timing of the issuance,” BDO added.

As part of its sustainable financing, BDO raised $150 million via the issuance of green bonds in 2017.

The International Finance Corp. (IFC), the investment arm of the World Bank, was the sole investor in the fund raising activity.

The bank, owned by the family of the late retail and banking magnate Henry Sy, has been tapping both the onshore and offshore domestic debt markets for much needed funding.

BDO’s bond and commercial paper program has been raised to P400 billion last year from only P100 billion when it was launched in August 2018. The last time it tapped the domestic bond market was in July last year.

So far, the bank has raised P111.1 billion, including P36 billion from the issuance of fixed-rate peso bonds in July last year, a record P40.1 billion via the issuance of senior fixed rate bonds in February last year, and P35 billion via the issuance of fixed rate bonds in February 2019.

It has also raised P41.32 billion via the issuance of long-term negotiable certificates of time deposits (LTNCDs) since April 2015.

In the offshore debt market, the Sy-led bank raised $600 million in July last year via the issuance of fixed-rate senior notes as part of its liability management initiatives. The debt instrument was issued under its $5 billion euro medium note program.