BPI eyes return to debt markets in 1st half

MANILA, Philippines — Bank of the Philippine Islands (BPI) is looking to tap the local and foreign debt markets within the first half of the year to raise funds to refinance its maturing obligations and beef up its lending portfolio.

In an interview with reporters, BPI chief finance and sustainability officer Eric Luchangco said the Ayala-led bank is looking at returning to the offshore bond market to refinance $300 million worth of bonds set to mature in September.

“We will do the bond this year. That’s the most likely way we’re going to refinance because we have maturity in September. It’s just a matter of finding the right time for that. We’re still looking sometime in the coming months,” Luchangco said.

He said the planned offshore bond issuance won’t be later than the second quarter.

“Maybe end of the first quarter. We’re just trying to find the right time in the market and so we could come a little earlier. If ever we do, it will probably be late in the first quarter. We’re already in February but we’re not yet quite ready to pull the trigger,” he added.

The 172-year-old bank is looking at raising $300 million to refinance the maturing debt.

“It might be a size similar to what we’re replacing, which is $300 million. But we need to look at the timing,” Luchangco said.

In August, last year BPI raised $300 million through a syndicated loan to partially finance its maturing foreign obligations. The amount was higher than the original $200 million due to a strong reception in syndication supported by 21 lenders.

Loan syndication occurs when a borrower requires an amount that is too large for a single lender and multiple lenders pool together and forms a syndicate to provide the borrower with the requested capital.

The bank opted for a loan syndication instead of returning to the offshore debt market to refinance its existing $600 million bond due in August last year.

Luchangco said the listed bank is also looking at tapping the onshore debt market to raise funds to beef up its lending portfolio.

In November last year, BPI raised P36.66 billion via the issuance of 1.5-year peso fixed rate bonds due 2025.

In May 2022, BPI established a new P100-billion bond and commercial paper program after using up its previous P100-billion borrowing program created in late 2019.