BPI targets $300 million from dollar bond issue

MANILA, Philippines — Ayala-led Bank of the Philippine Islands (BPI) is set to raise at least $300 million as it returns anew to the offshore debt market, following fixed income investor meetings held yesterday.

In a disclosure to the Philippine Stock Exchange, the bank said it is planning a dollar-denominated benchmark-sized regulation S offering, which may include five-year fixed-rate and/or floating-rate notes, as well as 10-year fixed-rate senior notes.

The final issuance will be subject to market conditions. It will be issued under BPI’s existing $3-billion medium term note program.

“With regard to the size, we can only say it will be at least benchmark size (at least $300 million). On the yield, we will determine that later after talking to potential investors,” BPI treasurer Dino Gasmen told The STAR.

The notes also received a BBB+ rating from S&P Global Ratings, in line with BPI’s issuer credit rating of BBB+ with a stable outlook.

“This reflects our expectation that these notes will always rank equally with other senior unsecured obligations of the Philippine-based bank. The notes will constitute the bank’s direct, unconditional, unsecured and unsubordinated obligations,” S&P said.

The bank has mandated BPI Capital Corp. as sole global coordinator, alongside Bank of America Securities, HSBC, JP Morgan and UBS AG as joint bookrunners, to arrange the fixed income investor meetings.

For legal advisory, BPI has engaged SyCip Salazar Hernandez & Gatmaitan for Philippine law matters. The joint bookrunners have appointed Romulo Mabanta Buenaventura Sayoc & de los Angeles for Philippine law and Milbank (Hong Kong) LLP for English law matters.

This potential bond issuance comes as BPI continues to expand its funding sources to support business growth and strengthen its balance sheet.

In March 2024, BPI’s most recent foray into the international debt market drew strong investor interest, raising $400 million. The five-year notes were priced at a spread of T+105 basis points over US Treasuries, with a coupon rate of 5.25 percent.

In September 2019, the Ayala-led bank raised $300 million through the issuance of a five-year offshore debt paper.

BPI saw its net income jump by 20 percent to an all-time high of P62 billion in 2024 from the previous year’s P51.7 billion, driven by higher revenues.

For the fourth quarter alone, the bank’s net income inched up by eight percent to P14.1 billion from P13.1 billion in the same quarter in 2023.