Landbank raises P10.5B via Tier 2 notes

MANILA, Philippines - The Land Bank of the Philippines (Landbank) has successfully raised P10.5 billion through the issuance of peso-denominated Tier 2 notes.

The bank received orders of over P12.5 billion, double the original offer of P6.5 billion. As such, the bank raised the amount to P10.5 billion.

Landbank president and chief executive officer Gilda Pico said strong demand for the Tier 2 notes is an indication of strong investor confidence in the bank.

Investorsí strong appetite for the notes allowed the bank to set the coupon rate at 5.875 percent per annum after initially announcing a range of six percent.

Pico said the notes achieved the lowest coupon for a Tier 2 transaction and also marks the largest ever public peso bank issuance in the Philippines.

 “We are very pleased with the results of our capital raising exercise. The Tier 2 notes will further strengthen Landbank’s capital ratios and provide us significant room to continue pursuing our mandate of supporting countryside development,” Pico said.

With an issue date of Jan. 27, 2012, the Tier 2 notes will carry a tenor of 10 years and three months, with a call option after the fifth year.

Under the terms of offer, Landbank will pay interest on the notes on a quarterly basis and will be fixed for the life of the notes.

Landbank said that there is no step-up in the interest rate should the bank decide not to exercise the call option.

 The GFI earlier tapped Deutsche Bank AG, Manila Branch, The Hongkong and Shanghai Banking Corp. and Standard Chartered Bank acted as the joint lead arrangers and selling agents for the transaction.

Another selling agent was the Multinational Investment Bancorporation. Landbank was also a selling agent on a limited basis.

 At present, Landbank ranks among the top five universal banks with a large network of branches and automated teller machines well distributed in 79 of the country’s provinces.