BPI sets P100-B bond, commercial paper offering

Ayala-led Bank of the Philippine Islands has unveiled a new P100-billion bond and commercial paper offering program to support expansion plans.

This is an update from the earlier-approved P50-billion bond program, the bulk of which has been used up.

“The issuance of bonds and commercial papers under the program shall be subject to market conditions and shall be determined by requirements of the bank’s business,” BPI disclosed to the Philippine Stock Exchange on Thursday.

More and more banks are tapping the local bond market, mainly to reduce reliance on deposits and gain more access to long-term funding.

Commercial papers refer to IOUs or debt paper which mature in one year or less while bonds are IOUs that mature in over a year.

In the meantime, BPI’s asset management subsidiary BPI Investment Management Inc. (Bimi)—the country’s largest manager of investment companies and mutual funds—agreed to assume the management and distribution of the various mutual funds currently under the management of PhilAm Asset Management Inc. (Pami).

Bimi manages the ALFM Funds which represent about 39 percent of the industry.  The addition of the Pami funds under Bimi’s management will double its product offerings to 18 and nearly triple its client base from 50,000 to 140,000.  The deal will see Bimi’s assets under management increase to nearly P165 billion.

Bimi and Pami expect to complete the assignment and assumption transaction by Dec. 20.

Bimi president Martin Enrile assured Pami investors that the transition would be as seamless as possible.

“Like all mutual funds, the Pami funds follow certain investment guidelines set by its shareholders and boards of directors.  Bimi will manage the funds prudently in accordance with the investment objectives and guidelines of each investment company,” he said.  “Pami investors can expect to benefit from Bimi’s consistent track record and access to its parent bank BPI’s considerable digital infrastructure and 168 years of pioneering experience in banking and finance.”

Pami is one of the country’s oldest fund management companies. It has one of the most diversified range of investment products and largest client base.