Security Bank raises P18.5 billion from over subscribed bonds
MANILA, Philippines — Security Bank Corp. raised a record P18.5 billion as investors swarmed its bond offering during its return to the domestic bond market.
The issuance that is part of the bank’s P100-billion peso bond and commercial papers program was more 2.3 times oversubscribed from its original issue size of P8 billion.
“This is the largest issue size of the bank to date. Due to strong demand for the bonds, the bank exercised its oversubscription option and accepted offers above its minimum P8 billion issue size,” Security Bank said in a statement.
The 1.5-year bonds due 2025, with a fixed rate of 6.425 percent per annum, were listed on the Philippine Dealing and Exchange Corp. (PDEX) to provide secondary market liquidity to investors who would like to trade the instruments.
Arnold Bengco, executive vice president and financial markets segment head atSecurity Bank, said that the successful issuance and oversubscription is testament to investor confidence in the bank and its commitment to provide BetterBanking service.
Proceeds of the fund raising activity, the bank said, would help diversify the bank’s funding sources and support its lending activities.
Philippine Commercial Capital Inc. (PCCI) served as sole bookrunner, while SB Capital Investment Corp. and PCCI acted as joint lead arrangers and selling agents.
Last year, Security Bank raised P30.6 billion as it tapped the domestic bond market twice. It issued P16 billion worth of fixed-rate bonds due 2024 in July and another P14.6 billion in November.
Security Bank’s earnings slipped by 11 percent to P2.4 billion in the first quarter of the year from P2.7 billion in the same quarter last year on the back of higher provision for potential loan losses.
Provision for credit losses surged to P616 million from January to March this year, 7.7 times the P80 million made in the same period last year.
The higher provision was made despite the steady improvement in gross non-performing loan (NPL) ratio to 3.12 percent from 3.65 percent a year ago, while NPL reserve cover increased to 99 percent from 90 percent.
The bank’s loan book inched up by five percent to P489 billion, while its deposit base stood at P525 billion.
Total assets increased by 12 percent to P794 billion, while shareholders’ capital inched up by five percent to P128.7 billion.
The 72-year old bank has a total of 317 branches and 659 ATMs, cash recycler machines and cash acceptance machines.
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