BDO closes bond offering a week early

BDO Unibank, Inc., a member of the SM Group, has shortened the offer period for its second ASEAN Sustainability Bond issue worth an initial ₱5 billion and closed it on January 16, 2024.

In a disclosure to the Philippine Stock Exchange, the bank said the offer was backed by strong demand from both retail and institutional investors, hence the decision to close the offer period a week earlier than the original schedule of January 22, 2024.

The Peso-denominated Sustainability bonds bear a coupon gross rate of 6.025 percent and net rate of 4.57 percent, due in one-and-a-half (1.5) years. The issue, settlement, and listing date will be on January 29, 2024.

The bank did not disclose the actual amount it raised from the ASEAN Sustainability Bonds and whether it upsized the ₱5 billion offer in light of the strong demand.

The net proceeds of the issuance are intended to diversify the Bank’s funding sources, and finance and/or refinance eligible assets as defined in the Bank’s Sustainable Finance Framework.

Standard Chartered Bank was the issue’s Sole Arranger, while BDO Unibank, Inc. and Standard Chartered Bank were the Selling Agents, and BDO Capital & Investment Corporation was the Financial Advisor.

The bank said the proposed issuance marks its second Peso-denominated ASEAN Sustainability Bond following a successful ₱52.7 billion issuance in January 2022.

The amount it raised in 2022 was more than 10 times the original offer of ₱5 billion due to very strong demand from retail and institutional investors.

“This was achieved despite the offer period being shortened from January 21, 2022 to January 19, 2022,” BDO said.

It added that, “This is a new milestone for the Bank as it exceeds its previous record of P40.1 billion for a single bond issuance, and by far the largest issuance for any Philippine financial institution or company.”

The bonds have a tenor of two years and a fixed rate of 2.90 percent per annum. Interest is payable quarterly, calculated on a 30/360 basis.