BDO’s dollar notes given investment grade rating
DOLLAR NOTES to be floated by BDO Unibank, Inc. fetched investment grade status from Moody’s Investors Service, on the back of the lender’s stable funding profile as it seeks to raise fresh capital.
In a statement, the international debt watcher gave a “Baa2” rating with a “stable” outlook for BDO’s dollar-denominated issuances under its $2-billion mediumterm note ( MTN) program since 2012.
“The Baa2 senior debt rating is anchored on BDO’s baa2 baseline credit assessment and Moody’s expectation of a very high probability of systemic support from the Philippine government,” the credit rater said, pointing out that
the rating matched the current status held by the Philippines which was last affirmed in June.
The country’s biggest bank in asset terms unveiled an offshore debt program in 2012 in order to raise funds for corporate loans, especially to those taking on infrastructure projects under the government’s infrastructure program.
The note program serves as a flexible facility for companies to issue foreign currency notes in global capital markets, and are offered on a continuing basis. The listed lender previously said that funds raised through its MTN program will be used for general funding and re-lending.
BDO can float dollar bonds in tranches until such time when it maximizes the approved amount of $2 billion.
Moody’s has given the same rating for BDO’s issuance of dollar debt papers in October last year, which came ahead of the bank’s announcement of the offering at the local bourse. Back then, the bank sold $300 million bonds in the offshore market which it used to settle maturing debts.
The offering fetched a coupon rate of 2.630%, which is deemed the “lowest ever” seen for a Philippine issuer.
The debt watcher said the next tranche of the bonds will come with a five to 5.5-year tenor, to be listed on the Singapore Stock Exchange.
Moody’s gave the Baa2 rating which is a notch above minimum investment grade to BDO’s fund-raising exercise as it took note of the bank’s “stable” asset quality and loss-absorbing buffers, coupled with its prominent and “growing” franchise, more than sufficient capital buffers, stable profitability, and robust funding and liquidity profiles.
On the other hand, the debt watcher also noted some weakness in BDO’s “relatively unseasoned” loan book and its high concentration in the manufacturing sector.
MOODY’S Investors Service assigned a “Baa2” rating to the bank’s dollar notes.