BPI Savings Bank raising P35 billion from bond issuance

MANILA, Philippines — The wholly owned thrift bank and consumer lending arm of Ayala-led Bank of the Philippine Islands (BPI) is raising as much as P35 billion from the onshore debt market.

BPI Family Savings Bank (BFSB) is initially issuing at least P2 billion worth of bonds with an option to upsize it as part of a bond program approved by the bank’s board of directors last Oct. 31.

The two-and-a-half year bonds carry an interest rate of 4.3 percent per annum to be paid quarterly. Offer period starts Nov. 25 until Dec. 6 but the bank has an option to adjust the timing of the offering.

BPI Capital Corp. is the sole selling agent, while British banking giant HSBC is the sole arranger and participating selling agent.

The country’s largest thrift bank in terms of assets is undertaking the fund raising activity to support its drive to diversify its investor base, fund its asset expansion, particularly loan growth, digitalization initiatives, and general corporate purposes.

BFSB was established in 1985 and is now the largest thrift bank with an asset base of P271 billion as of the end of June. It offers its 33 years’ worth of expertise in the consumer lending space.

BPI has also been active in tapping both the onshore and offshore debt markets to raise more funds to bankroll its expansion program and diversify its funding sources.

It has decided to double the size of its bond and commercial paper program to P100 billion as it already raised half of the original P50-billion program launched in September 2018.

Last month, it raised P3 billion from the issuance of long-term negotiable certificates of time deposits under a P50-billion program. LTNCTDs are peso-denominated certificates of time deposit with a minimum maturity of five years and are negotiable in the secondary market. Historically, it offers higher interest rates than regular deposits.

In the offshore debt market, the Ayala-led bank raised $300 million as it became the first Philippine bank to issue US dollar-denominated ASEAN green bonds.

Likewise, BPI raised 100 million Swiss francs from its maiden ASEAN Green bond issuance to bankroll green eligible projects. The two-year bonds were priced at 100.040 percent with a re-offer yield of -0.020 percent, the first negative yielding bonds to be issued out of the Philippines in the international capital markets.

In September last year, it raised $600 million via the issuance of five-year senior unsecured fixed rate Regulation S notes with a coupon of 4.25 percent to lengthen the maturity of the bank’s borrowings.