UnionBank raises P10.5B

Aboitiz-led UnionBank of the Philippines has raised P10.5 billion from a warmly received maiden local bond offering, proceeds of which will fund its expansion program.

UnionBank’s two-year fixed rate bonds were priced to yield 7.061 percent a year, the bank disclosed to the Philippine Stock Exchange on Monday.

The offering was oversubscribed by over two times the base offer of P5 billion, allowing the bank to increase the issuance.

“We are encouraged by the results of our maiden peso bond offering. The proceeds of the bonds will help support our strategic business expansion plans, while providing a new shorter dated investment instrument to our institutional and retail clients. We thank our investors for their unwavering confidence in UnionBank,” Jose Emmanuel Hilado, UnionBank senior executive vice president, chief financial officer and treasurer, said in a statement.

The bonds were priced at 30 basis points over the two-year BVAL Bloomberg Valuation Service (BVAL) benchmark on Nov. 21.

This was at the lowest end of UnionBank’s indicative pricing guidance of 30 to 50 basis points that the bank communicated during its roadshows in Manila, Cebu and Davao.

HSBC and Standard Chartered Bank are the joint lead arrangers and bookrunners of the transaction. They are also the selling agents, together with UnionBank.

With the issue size already oversubscribed, UnionBank opted to shorten the public offer period by almost a week ahead of the original target.

The bonds will be issued and listed on fixed income trading platform Philippine Dealing and Exchange Corp. on Dec. 7. This is the first issuance under a P20-billion multi-tranche bond and commercial paper program approved by UnionBank’s board of directors last August.