China Bank set to raise P75B via bond offer

/ 05:28 AM April 05, 2019

Sy family-led China Bank is setting up a P75-billion bond program for the next three years, joining the bandwagon of banks tapping the bond market to fund robust lending activities.

Such a bond program gives Chinabank more options to raise funds and reduce reliance on deposits.


Chinabank’s fundraising exercise of up to P75 billion will be done in several tranches for the next three years.

These may be in the form of retail bonds and/or commercial paper.


Retail bonds are long-term debt paper while commercial paper are short-term unsecured promissory notes or IOUs.

“The proceeds shall be used to support the bank’s strategic initiatives and expansion programs. This in line with the bank’s intention to be an active participant in the ongoing economic expansion of the country and the government’s infrastructure initiatives,” the bank said in a disclosure to the Philippine Stock Exchange on Thursday.

Chinabank has secured board approval to issue these IOUs.

The BSP recently issued new rules that made it easier for banks to issue bonds.

Previously, the BSP required banks that would like to offer bonds to back up 100 percent of these bonds with government securities as collateral.

If the bank won’t use government securities as collateral, then the value of collateral must exceed that of the issue size.

A new circular issued by the BSP—circular 1010 series of 2018—scrapped this collateral requirement.


However, banks are now required to enroll or trade the issued bonds in a formal market.

Given a more flexible regulatory environment, some of the country’s largest banks have set up large debt offering programs to diversify funding sources amid rising demand for long-term loans for big-ticket projects such as infrastructure.

Founded in 1920, China Bank is the country’s first privately owned local commercial bank in the Philippines providing a full range of banking products and services to corporate, commercial, and retail customers through over 621 branches nationwide (includes branches of thrift bank subsidiary, China Bank Savings).

Read Next
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: bond market, China Bank, Chinabank, lending
For feedback, complaints, or inquiries, contact us.

© Copyright 1997-2020 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.