BPI upsizes peso bond issuance to P25 billion on strong demand

BANK OF THE Philippine Islands (BPI) raised P25 billion via peso-denominated bonds which will be used to diversify funding sources.

The Ayala-led bank has issued P25 billion worth of fixed-rate debt papers at the Philippine Dealing & Exchange Corp. (PDEx) in Makati City on Thursday, the largest local bond listing to date.

The papers will mature in 1.25 years and carry an interest rate of 6.797% per annum to be paid quarterly until March 2020.

The issuance marks the maiden tranche of its P50-billion bond or commercial paper program approved by the lender’s board last Sept. 19.

In his speech, BPI President and Chief Executive Officer Cezar P. Consing said the amount raised is five times larger than the P5 billion it initially intended to issue, but is priced at the tight end of the original price range.

“The order book exceeded P38 billion, indicative of the trust placed by thousands of investors,” he added.

Antonio V. Paner, BPI treasurer and global markets head, said the bank wants to raise peso-denominated papers to have alternative funding sources.

“As you know, we’re diversifying... Now, we’re doing bonds so that we will have an array of funding alternatives, [and] also we want to give our clients an alternative investment option,” Mr. Paner told reporters yesterday.

Lenders can now raise fresh funds through corporate bonds with greater ease as new rules do away with having to secure approval from the Bangko Sentral ng Pilipinas.