UnionBank returns to domestic debt market

MANILA, Philippines — Listed Union Bank of the Philippines is returning to the domestic bond market to raise at least P2 billion via a dual-tranche bond offering with bond exchange option.

In a disclosure to the Philippine Stock Exchange (PSE), the Aboitiz-led bank said that it has started the public offer of its 1.5-year senior fixed rate series F bonds due 2025 and three-year senior fixed rate series G bonds due 2026.

The fund raising activity is part of UnionBank’s P50 billion bond program and each tranche would be offered with a minimum aggregate principal amount of P1 billion, with an oversubscription option.

The public offering of the 1.5- and three-year bonds carrying interest rates of 6.5625 percent and 6.68 percent per annum, respectively, is set to end on Nov. 29 and the listing on the Philippine Dealing and Exchange Corp. (PDEx) on Dec. 5.

Likewise, UnionBank has extended to the holders of its P8.11 billion, 2.75 percent fixed rate series C bonds due Dec. 9 the option to sell the exchangeable bonds to the bank in exchange for subscription to any of the 1.5 or three-year bonds.

The bond exchange period will end on Nov. 24. Any interest accruing to the exchangeable bonds from the date of the last interest payment up to and including the issue date of the new bonds will be paid on Dec. 4.

The listed bank has tapped ING Bank Manila Branch and Standard Chartered Bank as joint lead arrangers, bookrunners and selling agents.

UnionBank earlier raised its bond program by 28 percent to P50 billion from P39 billion.

Proceeds of the bond program will be used to finance the migration of the acquired Citi consumer banking business, as well as continued enhancements of its digital channels and feature builds to accelerate its aspiration of becoming a leading consumer bank.

The earnings of UnionBank fell by 20 percent from January to September this year after taking a P3.6 billion hit from the integration of the consumer business of global banking giant Citi.

Based on its latest financial statement, the bank booked a net income of P8.1 billion during the nine-month period, P2.02 billion lower than the P10.12 billion recorded in the same period last year.

Last year, UnionBank focused on the seamless integration of the acquired Citi consumer business and the commercial launch of UnionDigital as one of the six digital banks licensed by the Bangko Sentral ng Pilipinas.