PNB increases Tier 2 issuance to P5.5B due to strong demand

The Philippine National Bank (PNB) successfully closed its Tier 2 notes issuance. Subscriptions amounted to P7.82 billion, 2.6 times the original issue size of P33 billion. Given the overwhelming market response, PNB increased the issue size by 83 percent to P5.5 billion. The issue is considered a landmark issue, being the most successful and the largest peso lower Tier 2 issuance in the Philippines to date.

The facility was priced at the indicated minimum rate of 10 percent. The notes were rated Ba3 by Moody’s. Proceeds of the notes will be used to further strengthen PNB’s capital base and improve the bank’s capital adequacy ratio from 17 percent to 22 percent.

PNB has been showing improvement in its profitability since 2002. The bank currently ranks fifth in terms of assets and fourth in terms of number of branches in the Philippines. PNB also has the largest overseas presence among Philippine banks, with 100 branches and offices worldwide. The bank’s large overseas network has enabled the bank to be one of the largest players in the remittance business, with a 22-percent market share in 2005.

PNB president Omar Mier said, "we are very pleased at the success of this Tier 2 issue. The overwhelming positive response by investors demonstrates their long term confidence in PNB’s sound strategy. We are also appreciative of the underwriting group led by ING which have exhibited their strong marketing and distribution capabilities in making this issue an unqualified success."

ING Bank N.V., Manila branch is the lead manager and sole bookrunner for the issue. Selling agents include First Metro Investment Corp., which is also a co-manager for the issue, and Multinational Investment Bancorporation. PNB itself is a limited selling agent.