Security Bank Corp. is poised to return to the global bond market for the first time in three years by drawing down from its recently-created $1-billion medium term notes (MTN) facility.
The bank told the Philippine Stock Exchange on Friday that it had mandated Citigroup, CLSA, MUFG and UBS as lead managers and joint book runners to arrange a series of fixed income investor meetings and calls in London, Singapore and Hong Kong starting Sept.4.
A “regulation S” (reg S) offering of US dollar-denominated senior unsecured notes under the issuer’s recently established $1-billion MTN may follow, subject to market conditions, the disclosure said.
A reg S offering means the issuance, which is made outside the US, is exempted from registration requirements in the US.
The notes are expected to be rated “Baa2” by Moody’s, the disclosure said.
Baa2 is the ninth highest rating in Moody’s long-term corporate obligation rating. Obligations rated Baa2 are deemed with moderate credit risk. It is one notch higher than the minimum investment grade rating.
The last time SBC tapped the offshore bond market was in 2015, when it raised $300 million from a five-year bond issuance that was priced to yield 3.95 percent a year.
SBC’s creation of the MTN program allows the bank to have constant cash flows coming in from its debt issuance, typically with tenors of five to 10 years.
These can be continuously offered by a company to investors through a dealer.
Based on the bank’s latest financial report, SBC’s capital expenditure commitment covers the following: Investments in electronic systems to comply with regulatory requirements such as electronic money laundering monitoring system; investments in other systems such as for credit evaluation; upgrades of existing systems such as telecommunications system; expansion of the electronic banking channels; ATM installations; renovation or relocation or branch premises and investments in new branches.—DORIS DUMLAO-ABADILLA