BDO TAPS OFFSHORE BOND MARKET, RAISES $600M POSSIBLE RETURN TO STRICT LOCKDOWN WORRIES MARKET

The country’s leading lender, BDO Unibank Inc., has raised $600 million from the offshore bond market, building up its cash hoard while interest rates are favorable.

Based on a disclosure to the Philippine Stock Exchange, BDO’S fixed-rate notes issue has a coupon rate of 2.125 percent a year and a tenor of 5.5 years. The bonds carry an investment grade rating of “Baa2” from Moody’s Investor Service.

The transaction was oversubscribed, with orders hitting $2.9 billion, or about five times the offered amount.

“The senior note issue is part of the bank’s liability management initiatives to tap longer-term funding sources to support dollar-denominated projfootwear ects,” the BDO disclosure said.

Standard Chartered Bank acted as sole global coordinator, while Standard Chartered Bank and Merrill Lynch (Singapore) Pte. Ltd. were the joint bookrunners and joint lead managers for the transaction.

BDO embarked on this transaction by drawing down from its existing $5-billion euro medium-term notes.

“It’s just good to have diverparel sified funding and also because the borrowing rates today for the Philippines and its corporate [issuers] are at all-time lows,” BDO Capital president Eduardo Francisco said when asked about why banks were scrambling to tap bond markets these days.

Just last week, BDO also raised P36 billion from an offering of local bonds with a tenor of 1.75 years and a coupon rate of 3.125 percent a year.

local stock barometer slipped below 6,300 on Tuesday on escalating fears that the rising local coronavirus infection would trigger a return to strict lockdown protocols.

The main-share Philippine Stock Exchange index (PSEI) lost 61.01 points, or 0.96 percent, to close at 6,267.40 on intensified selling by foreign investors.

“The PSEI continues to move in the opposite direction of most global markets as investors weigh the possibility of the reimplementation of stricter lockdown restrictions as new COVID-19 cases surge,” said Christopher Mangun, head of research at AAA Equities.

“A pickup in foreign outflows also dampened the sentiment. We may see the main index move lower and test support at 7,160 in the coming days,” he added.

There was P2.51 billion worth of net foreign selling in the market for the day. Value turnover stood at P7.59 billion.

Despite the PSEI’S decline,