BDO, BPI raise nearly P80 billion from bond sale

MANILA, Philippines — Sy family-owned BDO Unibank Inc. and Ayala-led Bank of the Philippine Islands (BPI) raised close to P80 billion through the issuance of bonds in the domestic market.

In a disclosure to the Philippine Stock Exchange (PSE), BDO said it raised a record P52.7 billion through the sale of its maiden peso-denominated sustainability bond.

Due to strong demand, the amount raised in the fund raising activity was more than 10 times the original offer size of P5 billion, prompting BDO to shorten the offer period.

“This is a new milestone for the bank as it exceeds its previous record of P40.1 billion for a single bond issuance, and by far the largest issuance for any Philippine financial institution or company,” it said.

Proceeds from the issuance of the two-year bonds with a fixed rate of 2.90 percent per annum will be used to diversify the bank’s funding sources, and finance/refinance eligible assets under  the  Sustainable Finance Framework.

The fund raising activity was the third tranche of BDO’s P365-billion bond and commercial program, almost four times the P100 billion launched in August 2018.

The country’s largest bank raised P35 billion through the issuance of fixed-rate bonds in February 2019, another P40.1 billion via the offering of senior fixed rate bonds in February 2020, and P36 billion via the offering of fixed-rate peso bonds in July 2020.

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

Also in July 2020, the bank also raised $600 million through the issuance of fixed-rate senior notes in the offshore debt market as part of its liability management initiatives. The debt instrument was issued under the bank’s $5 billion euro medium note program.

Meanwhile, BPI raised P27 billion after returning to the onshore debt market via the sale of fixed-rate peso-denominated bonds.

The amount raised was more than five times the minimum P5 billion offering as the bank was forced to cut short the offer period by one week due to the strong demand from investors.

BPI treasurer Dino Gasmen earlier said the proceeds of the fund raising activity would be used for general corporate purposes, including refinancing.

Gasmen said BPI continues to invest in digital banking capabilities to better serve customers.

“Digitalization will enable our branches to provide more meaningful interactions to address the increasingly complex financial needs of our clients. We are confident and hopeful that investors will continue to support our fund-raising initiatives,” Gasmen said.

The two-year bonds, which carry a yield of 2.8068 percent per annum and due 2024, will be listed on the Philippine Dealing and Exchange Corp. (PDEx) on Jan. 31.

The fund raising activity was the fourth tranche of BPI’s P100-billion bond and commercial paper program. It last tapped the onshore debt market in August 2020 when it raised P21.5 billion via its COVID Action Response (CARE) bonds, the first-ever COVID bond offering in the country.

It also raised P15.33 billion through the issuance of fixed rate bonds due 2022 in January 2020.