Landbank to raise over P20 billion via bonds offer

MANILA, Philippines — State-run Land Bank of the Philippines is raising over P20 billion through a bond issuance this year, according to the bank’s official.

With proceeds earmarked for social projects, Landbank president and CEO Lynette Ortiz said the financial institution is just waiting for the proper timing and execution of the offering, with the goal to tap the market at the most favorable window.

“But we do have approvals for a pretty sizable amount. I don’t think I would be at liberty at the moment to actually say the exact amount,” she told reporters. “But I mean, certainly it will be more than 20 billion.”

Ortiz said that Landbank is still in the process of determining the “sweet spot” for the bond tenor, which will likely be one to five years, and they are still deciding whether to issue it in one or two tranches.

“Similar to how bank issues have also come out, it will likely be between one to five years. Yeah, it’ll be right there in the sweet spot,” Ortiz said.

In January, the bank announced that it is preparing to access the debt market via.

According to Ortiz, the timing of the bond issuance for the right market window is crucial, and with the Philippines now in the final review stage for possible inclusion in the J.P. Morgan Index for Emerging Markets, they hope more foreign investors will participate in the bond market.

“You know, it’s all about issuing at the right market window. We’re going to wait for a lot of things that are happening. So, you will see, hopefully, more foreign players come in and invest in bonds,” she said.

She also said that the bond would be sustainability-focused, branded as ASENSO (Agriculture, Sustainability, Environment and Social) bonds, and aligns with development goals.

The proceeds will fully support the agricultural value chain, finance clean energy projects and fund other social initiatives.

Meanwhile regarding the refilling of Landbank’s charter change bill, Ortiz said she would defer to the Department of Finance (DOF) on the filing process and emphasized that her office would provide full support to Secretary Ralph Recto in advancing the initiative.

“Okay for me, honestly, this is really driven by the DOF. And he’s the chairman of our board and therefore, I will defer to DOF’s mandate and moves,” Ortiz said.

The Landbank charter amendment failed to reach final approval during the 19th Congress, as it was stalled at second reading in the Senate.

The proposed revisions will raise Landbank’s authorized capital stock to P1 trillion from P200 billion, while maintaining the government’s majority 70-percent stake.

The lender will also be allowed to raise funds for long-term development by issuing various debt instruments, capped at 10 times its paid-in capital and surplus.