BDO seeks to raise $300M for debt refinancing

BDO Unibank Inc., the country’s biggest lender, said it had issued $300 million in fixed-rate senior notes, which would allow the bank to refinance existing debt.

BDO said in a stock exchange filing Tuesday that the issue was priced at 2.63 percent, with a maturity of five years.

The funds would allow BDO “to tap longer-term funding sources to support dollar-denominated projects.” It would effectively refinance outstanding bonds worth $300 million maturing in February next year, the filing showed.

“With demand coming primarily from Asian investors, the transaction was three times oversubscribed and is the lowest ever coupon for any USD bond for a Philippine issuer,” BDO said.

Baa2 rating

Standard Chartered Bank and UBS AG acted as joint lead arrangers for the transaction. The notes were issued under BDO’s medium term note program.

Moody’s Investors Services earlier said it had assigned a  Baa2 rating on the note offer.

It said that the Baa2 senior unsecured debt rating was anchored on BDO’s baa2 baseline credit assessment  and Moody’s expectation “of a very high probability of systemic support from the Philippine government.”

13-percent growth

The following factors were considered: BDO’s domestically focused operations, prominent, and growing franchise, stable asset quality and loss absorbing buffers, sufficient capital levels that exceed the regulatory minimal, and robust funding and liquidity profile.

BDO closed the first half of the year with a 13-percent growth in profit to P13.2 billion. The bank, a subsidiary of the Sy family’s SM Investments Corp., credited those gains mainly from its core businesses and a one-time gain from the consolidation of its insurance operations.