BDO raises P10B from debt note issuance

SCREENGRAB from www.bdo.com.ph

MANILA, Philippines—Banco de Oro Unibank raised P10 billion from the issuance of debt notes qualifying as tier 2, or supplementary, capital.

It was the first time the bank offered this instrument that kept to the tighter Basel 3 capital adequacy ratio framework—a complex package of reforms designed to improve the ability of banks to absorb losses. This framework, which regulators required banks to conform to starting this year, also extended the coverage of financial risks and strengthened banks’ firewalls specially during periods of stress.

In a disclosure to the Philippine Stock Exchange, the country’s biggest lender said its offering was warmly received by the market as it was oversubscribed by nearly three times the base offer of P5 billion. This development encouraged the bank to upsize its offering to P10 billion and close the offer period ahead of schedule.

Strong demand was noted from both retail and institutional investors.

“Our clients and the investing public played a significant role in this successful undertaking, which is envisioned to further improve the bank’s capital base and allow us to embark on our expansion plans,” BDO president Nestor Tan said.

The notes will have a maturity of 10 years and one quarter. But BDO has the option to redeem them after five years and one quarter. The final coupon rate was set at 5.1875 percent per annum; payable every quarter.

Issue date is set on Dec. 10, while maturity date will be on 10 March 2025.

Deutsche Bank AG Manila, Hong Kong and Shanghai Banking Corp. and Standard Chartered Bank were the joint lead arrangers and selling agents for the issue. BDO and Multinational Investment Bancorp. were the other selling agents.

BDO has more than 860 operating branches and over 2,500 ATMs nationwide. It also has a branch in Hong Kong as well as 29 remittance and representative offices in Asia, Europe, North America and the Middle East.

It was ranked the Philippines’ largest bank in terms of total assets, loans, deposits, capital and trust funds under management based on published statements of condition as of June 30, 2014.   Doris C. Dumlao