BPI sets $2-B medium-term note program

Ayala-led Bank of the Philippine Islands (BPI) is returning to the offshore debt market with an updated medium-term note (MTN) program worth up to $2 billion or its equivalent in other currencies.

In a disclosure to the Philippine Stock Exchange, BPI said its investment house BPI Capital was the sole global coordinator and lead arranger for the program.

With such MTN program, an issuer like BPI can generate constant cash flows from debt issuance, typically with tenors of five to 10 years. This will allow this issuer to tailor its borrowing to meet its financing needs.

These securities can be continuously offered to investors through a dealer, with investors being able to choose from differing maturities. As such, they are different from bonds because they can be offered to investors by the issuer’s agent instead of being underwritten by investment banks and then sold to the public in a tranche.

Any securities to be issued under this MTN program will not be registered with the Philippine Securities and Exchange Commission. No securities may be offered or sold in the United States without registration or pursuant to an exemption from, or in a transaction not subject to US registration requirements.

The bank earlier hinted it would  offer debt securities to the overseas market, to refinance some maturing offshore debt.

BPI recently bagged from global credit watchdog Standard & Poor’s a credit grade that is at par with the Philippine government’s all-time investment grade rating of BBB+, just one a notch away from A territory rating.