BDO taps offshore bond market, raises $600M

The country’s leading lender, BDO Unibank Inc., has raised $600 million from the offshore bond market, building up its cash hoard while interest rates are favorable.

Based on a disclosure to the Philippine Stock Exchange, BDO’s fixed-rate notes issue has a coupon rate of 2.125 percent a year and a tenor of 5.5 years. The bonds carry an investment grade rating of “Baa2” from Moody’s Investor Service.

The transaction was oversubscribed, with orders hitting $2.9 billion, or about five times the offered amount.

“The senior note issue is part of the bank’s liability management initiatives to tap longer-term funding sources to support dollar-denominated projects,” the BDO disclosure said.Standard Chartered Bank acted as sole global coordinator, while Standard Chartered Bank and Merrill Lynch (Singapore) Pte. Ltd. were the joint bookrunners and joint lead managers for the transaction.

BDO embarked on this transaction by drawing down from its existing $5-billion euro medium-term notes.

“It’s just good to have diversified funding and also because the borrowing rates today for the Philippines and its corporate [issuers] are at all-time lows,” BDO Capital president Eduardo Francisco said when asked about why banks were scrambling to tap bond markets these days.Just last week, BDO also raised P36 billion from an offering of local bonds with a tenor of 1.75 years and a coupon rate of 3.125 percent a year. INQ