BDO to issue dollar notes

BDO UNIBANK, Inc. (BDO) will issue $700 million in debt for its second drawdown under its dollar-denominated medium term note program, with the transaction attracting strong investor interest.

In a disclosure, the country’s largest bank in asset terms said it will issue $700 million in fixed rate senior notes under its $2-billion medium term note ( MTN) program.

The debt notes carry coupon rate of 2.95% and will mature in five and a half years. The notes were also met with strong appetite among investors, with offers reaching more than $2 billion.

“The transaction was overwhelmingly oversubscribed, with orders reaching $2.2 billion,” the listed lender said in a statement.

The fixed rate senior notes will be settled on Sept. 6.

“With a wide distribution across Asia Pacific and Europe, this transaction represents the largest single issuance by a Philippine bank to date,” BDO said.

In October 2016, the bank successfully sold $300 million bonds in the first drawdown of its MTN program that fetched a coupon rate of 2.63%.

Minus this second tranche, BDO still has room to issue around $1 billion more in notes under the facility.

According to the listed lender, capital to be raised from the issuance will be used for its liability management initiatives.

“The senior note issue is part of the bank’s liability management initiatives to tap longerterm funding sources to support BDO’s lending operations and general corporate purposes,” the bank said.

On Wednesday, global debt watcher Moody’s Investors Service assigned a “Baa2” rating with a “stable” outlook to the drawdown on the back of the lender’s stable funding profile.

BDO’s MTN was announced in 2012, with the bank seeking to raise funds for corporate loans, especially those taking on infrastructure projects under the government’s infrastructure program.

The bank’s net profit was little changed in the first six months of the year at P13.3 billion.

BDO shares closed at P127.10 apiece yesterday, down 90 centavos or 0.70%. —