Standard Chartered, two others cited for BDO notes

MANILA, Philippines – The Standard Chartered Bank (Philippines) Inc. (Standard Chartered), along with two other international banking institutions, recently won the Asiamoney 2008 Country Deal of the Year Award (Philippines) for successfully arranging P10-billion worth of 8.5-percent Subordinated Notes for Banco de Oro Unibank (BDO) last year.

The P10-billion booking, due 2018 non-call 2013, is considered the largest single tranche issuance of an institution for 2008 in an environment marked by economic downturn, volatilities and tight pricing. The order book saw total demand amounting to P25 billion or five times oversubscribed in the pre-IPO placement. Only P5 billion in bonds was originally in offer when the bank launched the 10-year non-call five-bond issue.

The demand level was overwhelming that BDO was able to double the deal size from P5 billion to P10 billion, forcing it to close the order book in just five days and yet still achieve pricing that was flat to the government’s local currency debt curve.

BDO entered the deal to improve its capital adequacy ratios (CAR) as it absorbed the acquisition of Equitable-PCI Bank in 2007. The proceeds were to be used to exercise a call option to repay existing dollar-denominated subordinated notes issue.

SCBP chief executive officer Eugene Ellis said that the impressive response from the investors firms up BDO’s standing as one of the biggest and most trusted financial institutions in the country today. It clearly demonstrates the depth of investor demand for the right name at the right price.

“Meanwhile, our role in the transaction reaffirms our commitment to be the right partner for the Philippines as it continues to assert itself as a significant economic player in Asia,” Ellis added in a statement.

SCBP marketed the deal to a wide investor base covering banks, insurance companies and retail as well as in mobilizing total orders that reached five times the original issue size. Retail investors comprised the bulk of the demand, attracted by the 8.5-percent coupon on offer.