Banco de Oro sets launch of $130-M bond issue

Banco de Oro Universal Bank (BdO) will launch its $130-million bond issue next week with UBS Investment Bank as sole book-runner.

This as the Bangko Sentral ng Pilipinas (BSP) approved the revision of the said senior note issue from $100 million to $130 million, a five-year tenor with a put option at year three.

The bond’s minimum placement was pegged at $50,000 and will be marketed to investors in Hong Kong, Singapore and Europe.

The bond issue was re-issued after BdO held it back when the global bond market experienced a poor performance in the third quarter of the year. The unsecured notes were originally scheduled for launching last July but the bank decided to postpone it as the global bond market weakened.

BdO officials said the notes would be used to finance a number of huge loans made by its unnamed corporate clients. "It is necessary to plug a particular funding gap of new corporate accounts as there is a growing demand for medium- to long-term lending," said Edith Dee-Dychiao, BdO vice president.

Dychiao stressed that the bond issue is not a Tier 2 capital undertaking. BdO has already secured a $20-million convertible loan with the International Finance Corp. (IFC), the investment arm of the World Bank. It will be used as additional capital for its branch expansion and loan portfolio.

The commercial banking arm of the SM Group also undertook recently a three-year risk sharing facility with the IFC worth $62.5 million, which would enable the bank to extend risk-free medium and long-term loans.

Early this year, BdO acquired high-end financial institution Banco Santander Philippines Inc. (BSPI) for P2.56 billion and the brokerage arm of the Santander Group for P28.4 million.