PNB raises record $750 M from bond offer

MANILA, Philippines — Lucio Tan-led Philippine National Bank (PNB) has raised $750 million from the offshore debt market via the issuance of fixed rate senior notes, with the fund raising activity heavily oversubscribed.

PNB president Jose Arnulfo Veloso said the landmark deal is the largest dollar bond issuance to-date by a Philippine bank.

“This transaction comes at an opportune time when we are building up the growth momentum at PNB,” Veloso said.

Veloso said the activity also supports Tan’s vision of further contributing to the Philippine growth story by helping the government’s massive infrastructure build up.

“The funds we are raising now are going to be used to help fund our growth trajectory. We are totally aligned with the government’s Build Build Build program and the focus on developing infrastructure around the archipelago,” Veloso said.

The bank’s board of directors recently approved the increase of its euro medium term note program from $1 billion to $2 billion.

The bank was originally raising at least $300 million to beef up its capital base and bankroll its expansion program but the order book reached $3.25 billion.

The notes to be issued on June 27 were priced at 99.473 percent and will carry a yield of 3.391 percent and a coupon of 3.28 percent.

Approximately 75 percent of the notes were allocated to Asian investors, while 25 percent were earmarked for investors from Europe, further diversifying and deepening PNB’s investor base.

Over 200 accounts participated in the transaction. Citigroup, HSBC and Standard Chartered Bank acted as joint lead managers and bookrunners.

“The proceeds of the notes will be used to support PNB’s loan growth, as new management increases focus on opportunities brought by the positive momentum of the Republic of the Philippines’ economic growth,” the bank said.

PNB also recently closed and signed a $250 million three-year syndicated term loan facility with a large group of international and regional Japanese banks.

In the onshore debt market, the bank has established a peso bond and commercial paper program amounting to P100 billion to be issued in one or more tranches.

It also raising P12 billion through the sale of shares to existing shareholders led by the LT Group of Companies to strengthen its common equity Tier 1 and enable the bank to sustain its asset growth.

It successfully raised P13.87 billion via the maiden offering of fixed-rate peso-denominated bonds early last month. The two-year bonds due 2021 were three times oversubscribed as the original volume of the issuance was only P5 billion.

Last February, PNB raised P8.22 billion via the issuance of long-term negotiable certificates of time deposits (LTNCDs) due 2024 as part of a series of fundraising activities lined up by the bank.