UnionBank raises P16 billion in return to local debt market

MANILA, Philippines — Aboitiz-led Union Bank of the Philippines has successfully raised P16 billion through a dual-tranche issuance of peso-denominated fixed rate bonds, marking its return to the domestic capital market under its expanded P100 billion bond program.

The bond sale, which drew strong demand from both institutional and retail investors, exceeded UnionBank’s initial target of P5 billion per tranche.

The 1.5-year Series H bonds due 2026 raised P9.25 billion with an interest rate of 5.88 percent per annum. Meanwhile, the three-year Series I bonds due 2028 generated P6.75 billion, offering a 6.02 percent annual interest rate.

Minimum investment was set at P100,000, with increments of P50,000 thereafter. Proceeds from the issuance will be used to extend term liabilities, expand the bank’s funding base, and support business growth and other general corporate purposes.

The bonds will be listed on the Philippine Dealing & Exchange Corp. today.

ING Bank N.V. Manila Branch, Philippine Commercial Capital Inc. and Standard Chartered Bank served as joint lead arrangers and bookrunners. They also acted as selling agents alongside UnionBank.

The bonds were issued as exempt securities and were not registered with the Securities and Exchange Commission under the Securities Regulation Code.

In December 2023, UnionBank raised P18.17 billion from the successful dual tranche offering of peso-denominated fixed rate bonds under the then P50-billion bond program.

It raised P10.34 billion from the issuance of 1.5-year Series F bonds due 2025 with an interest rate of 6.5625 percent per annum. It also raised another P7.83 billion via the issuance of three-year Series G bonds due 2026 that carries an interest rate of 6.68 percent per annum.

Strong demand from both retail and institutional investors enabled the bank to upsize the issuance to over nine times its initial minimum offer size of P2 billion for the two tranches.