BPI’s COVID bond sale breaches P3 B

Ayala-led Bank of the Philippine Islands (BPI) has exceeded the initially planned issuance of at least P3 billion, prompting it to end the offering of COVID response bonds.

The bank said it concluded the offer period of its maiden COVID response (CARE) bonds on July 8, more than a week ahead of the original schedule.

“Subscriptions in support of the country’s maiden COVID response bonds exceeded the initially planned issue size of P3 billion,” BPI said in a disclosure to the Philippine Stock Exchange (PSE).

The 1.75-year bonds carry an interest rate of 3.05 percent per annum, paid quarterly in arrear.

The 168-year old bank said proceeds of the fund raising activity would be used to augment the bank’s financing and refinancing of eligible micro, small and medium enterprises (MSMEs) under BPI’s sustainable funding framework.

“The bank values the significant contribution of MSMEs to the economy and aspires to help these enterprises bounce back from the paralysis caused by the pandemic,” it said.

The bonds are slated for issuance and listing on the Philippine Dealing and Exchange

Corp. (PDEx) on Aug. 7. BPI Capital Corp. and HSBC served as the joint lead arrangers, while BPI Capital was sole selling agent and HSBC acted as participating selling agent.

BPI has been tapping both the onshore and offshore debt markets for much needed funds. The bank has raised P49.22 billion under its P100billion bond and commercial paper program including P15.32 billion via the issuance of two-year peso fixed rate bonds last January and P33.89 billion last March.

In the offshore debt market, the Ayala-led bank raised $300 million last year as it became the first Philippine bank to issue dollar-denominated ASEAN green bonds. It also raised 100 million Swiss francs from its maiden ASEAN Green bond issuance to bankroll green eligible projects.

Meanwhile, BPI chief digital officer Noel Santiago said a vibrant hyperlocal market has emerged as the COVID-19 pandemic forced the world to implement limited mobility and strict social distancing guidelines.

“When we say hyperlocal, we’re talking about residents buying and selling products among and within their immediate communities,” Santiago said.