BPI gets BSP ok on P5B debt buyback

PHOTO courtesy of BPI

MANILA, Philippines–Ayala-led Bank of the Philippine Islands has obtained approval from the Bangko Sentral ng Pilipinas to exercise its option to retire P5 billion worth of debt notes ahead of maturity.

This allows BPI to avoid paying higher interest rates if these notes were not retired during the optional redemption period on December 13.

If otherwise kept in its books, these debt notes will no longer qualify as tier 2 or supplementary capital under the Basel 3 capital adequacy framework which will take effect in January 2014.  At the same time, they will be more expensive to service upon repricing.

In a disclosure to the Philippine Stock Exchange on Wednesday, BPI said it had received approval from the BSP on the optional redemption of tier 2 notes issued in December 2008.