PSBank enters bond market, to raise P3B

Thrift bank Philippine Savings Bank is debuting into the local bond market with a retail offering of at least P3 billion, boosting its funds for lending and expansion activities.

The two-year bonds were priced to yield a fixed rate of 5.6 percent a year. Interest payments will be made every quarter and full principal paid out at maturity in 2021.

The maiden bond offering of Metrobank’s thrift bank arm started on July 1 and will run until July 17.

This raises the curtain for PSBank’s P40-billion three-year bond program.

“We have always been on the lookout for opportunities to diversify our funding sources. Given market developments, we believe that this bond issuance is properly timed to provide potential institutional and individual investors with an alternative investment to lock-in their funds at a high yield and for a relatively shorter tenor,” PSBank president Jose Vicente Alde said in a disclosure to the Philippine Stock Exchange on Tuesday.

“Proceeds from the fund-raising exercise will support PSBank’s initiatives in expanding its consumer business as the bank gears up to provide innovative banking solutions and services,” he added.

The offering calls for a minimum investment of P500,000 and in multiples of P100,000 thereafter.

The bonds will be issued and listed on the Philippine Dealing and Exchange Corp. on July 24.

PSBank, Metrobank and First Metro Investment Corp. are the authorized selling agents.

Standard Chartered is the sole arranger and also a selling agent for this bond issuance.

Even as the banking industry was challenged by a volatile interest rate market in the first quarter of 2019—with rates only observed to be easing by the middle of this year—PSBank managed to post a double-digit growth of 10.3 percent year-on-year in net income to close the period with P680.7 million.

Its predominantly consumer loan portfolio rose by 6.8 percent year-on-year to P159.3 billion.

PSBank was recently given an issuer rating of PRS Aaa by local credit watcher Philippine Rating Services Corp. (PhilRatings), the highest rating on Philratings’ scale.

A company rated PRS Aaa is deemed to have a “very strong capacity to meet financial commitments relative to that of Philippine corporates.” —DORIS DUMLAO-ABADILLA