PNB, BDO raising additional funds from local, international debt market

MANILA, Philippines — Philippine National Bank (PNB) and BDO Unibank Inc. tapped the offshore and onshore debt markets to raise funds to lengthen the maturity of their funding sources and support their business expansion plans.

PNB raised $300 million as investors swamped the debut drawdown from its $1 billion Euro medium term note program to support the bank’s general corporate purposes.

Demand for the offering was approximately $1.2 billion at its peak, equivalent to an oversubscription of four times the issue amount.

In terms of investor breakdown by geography, 86 percent was allocated to investors in Asia, and 14 percent to Europe, the Middle East, and Africa (EMEA).

About 74 percent was allocated to asset and fund managers, 12 percent to insurance companies, nine percent to banks and five percent to private banks and others.

The notes to be listed on the Singapore Exchange Securities Trading Limited were priced at 99.532 per 100 with a coupon rate of 4.25 percent per annum and a tenor of five years plus one day.

Citigroup, MUFG, Standard Chartered Bank and Wells Fargo Securities served as joint arrangers, joint lead managers, and joint bookrunners for the fund raising activity.

The country’s fifth largest bank in terms of assets is also raising as much as P20 billion through the issuance of long term negotiable certificates of deposits (LTNCDs) to extend the maturity profile of the bank’s liabilities as part of overall liability management and support compliance with required liquidity ratios of the Bangko Sentral ng Pilipinas (BSP).

LTNCDs offer higher interest rates but could not be pre-terminated like regular time deposits.

PNB has issued P22.495 billion worth of LTNCDs over the past three years. It issued P7 billion worth of LTNCDs due 2022 last December 2014 and another P6.35 billion worth of LTNCDs due 2023 in October last year.

On the other hand, BDO is raising at least P5 billion from the issuance of LTNCDs to lengthen the maturity of its funding sources and support business expansion plans.

The country’s largest bank has the option to increase the issue size, depending on market demand. It also reserves the right to adjust the timing of the offer as needed.

The offering of the LTNCDs with a term of five and a half years with indicative pricing of 4.5 percent started yesterday and will end on April 30. Deutsche Bank AG Manila Branch and ING Bank N V Manila Branch are the joint lead arrangers and selling agents for the issue, while BDO and BDO Private Bank are the other selling agents.

BDO last issued P11.8 billion worth of LTNCDs in August.