Security Bank’s foray in bond market yields P18B

Key lender Security Bank Corp. has debuted in the local retail bond market with a warmly received P18-billion issuance, thus expanding its funding base and boosting lending activities.

The two-year bonds were priced to yield 5.875 percent a year, or at the lower end of its pricing range, due to strong demand.

Taking advantage of strong investor interest, Security Bank exercised its oversubscription option and accepted offers above the initial P5-billion issue size, the bank disclosed to the Philippine Stock Exchange on Friday.

Security Bank executive vice president and treasurer Raul Pedro said the successful issuance and oversubscription were a testament to investor confidence in the firm and its commitment to provide better banking.

“Over the last few years, Security Bank has made the right moves to provide value to our customers—consistently growing our customer base and winning awards both locally and abroad. This maiden issuance in the peso bond market is meant to diversify our funding sources, creating a path to tap the capital markets again in the near future in order to optimize our funding costs and continue our focus on delivering best in class returns to our shareholders,” he said.

Minimum denomination was set at P500,000, with increments of P100,000 thereafter. Deutsche Bank acted as the sole arranger and bookrunner.

The bonds were listed on the Philippine Dealing & Exchange Corp. to provide secondary market liquidity to investors who would like to trade the instruments.

The bank’s board approved a P50-billion bond program late last year in a bid to diversify funding mix.

It was earlier reported that two tranches of fundraising via retail bond offering were expected within the next six months. Another issuance may have a longer tenor of five years. —DORIS DUMLAO-ABADILLA