BPI expects to raise P3B from pioneering COVID-19 response bonds

Ayala-led Bank of the Philippine Islands (BPI) is raising at least P3 billion from a pioneering bond offer dedicated to efforts against the new coronavirus disease (COVID-19).

The COVID Action Response or CARE bonds were priced to yield 3.05 percent per annum for a tenor of 1.75 years, BPI disclosed to the Philippine Stock Exchange on Monday.

“This provides the public an opportunity to invest in fixed rate bonds that are intended for micro, small and medium enterprise (MSMEs) borrowers at a time when these small businesses need the liquidity to restart and sustain their operations,” BPI chief financial officer Maria Theresa Marcial-Javier said in a text message.

This is the country’s first peso-denominated bonds to be issued as a direct response to the pandemic.

The offering will run from June 22 until July 17 this year, while the issue and listing date will be on Aug. 7.

The CARE bonds will be issued as the third tranche of BPI’s P100-billion bond program.

The SEC has confirmed the CARE Bonds would qualify under the Association of Southeast Asian Nations (Asean) social bonds standards in the Philippines.

Under the Asean framework, social bonds are meant to fund projects that directly aim to help address or mitigate a specific social issue and/or seek to achieve positive social outcomes especially, but not exclusively, for a target population.

As a borrower segment, MSMEs only get 10 centavos for every peso of loans extended by the Philippine banking system. However, they account for 60 percent of the total annual revenues of all Philippine businesses, contribute 35 percent of the country’s gross domestic product and employ 63 percent of the labor force.

The initiative is part of the Ayala group’s comprehensive program for MSMEs. —DORIS DUMLAO-ABADILLA INQ