3-year peso bond offering raises P4.65B for PSBank

The Metrobank group’s thrift bank arm, Philippine Savings Bank (PSBank), has raised P4.65 billion from a fresh offering of three-year peso-denominated bonds, boosting its long-term funding.

The offering was upsized from the base offer of P3 billion given strong demand from the public. The offering was oversubscribed by almost two times the base offer, the bank said in a statement.

PSBank shortened the offering period to Jan. 13 from the original Jan. 21 as the order book had been filled early.

The three-year peso fixed rate bonds were priced to yield 4.5 percent a year. Interest payments will be paid on a quarterly basis.

This is the second tranche of PSBank’s P40-billion funding program. In July 2019, PSBank was able to raise P6.3 billion for the first tranche.

Both issuances give the bank an opportunity to access long-term funding as it further expands its consumer banking business, PSBank said.

The bonds will be listed on the Philippine Dealing and Exchange Corp. on Feb. 4.

Standard Chartered Bank was mandated as arranger and selling agent for this offering.

The other selling agents were Metrobank, First Metro Investment Corp. and PSBank.

Philippine Dealing and Trust Corp. will serve as the registry and paying agent of the issuance. Picazo Buyco Tan Fider and Santos acted as transaction counsel while Development Bank of the Philippines served as trustee.

More and more banks are tapping the local bond market, mostly to reduce reliance on deposits and gain more access to long-term funding to allow them to fund more projects.

PSBank grew its net profit in the third quarter of 2019 by 20 percent year-on-year to P813 million on higher interest earnings and service fees as well as a turnaround to profitability of its securities trading business. This brought the January to September net profit to P2.2 billion, up by 8.4 percent from the level in the same period in the previous year.