BPI raises P21.5B from landmark COVID19 response bonds

Ayala-led Bank of the Philippine Islands (BPI) has raised P21.5 billion from a pioneering bond issue dedicated to coronavirus (COVID-19) response efforts – an offering that was oversubscribed by more than seven times the base offer.

The COVID Action Response or “CARE” bonds – which were priced to yield 3.05 percent per annum for a tenor of 1.75 years – were listed on the Philippine Dealing & Exchange Corp. (PDEx) on Friday.

This is the country’s first peso-denominated bond issuance that was undertaken as a direct response to the COVID-19 pandemic. Proceeds will be channeled to micro, small and medium enterprises (MSMEs) at a time when this segment needs the liquidity to restart and sustain their operations amid challenges arising from the COVID19 pandemic.

The offering was upsized from the base offer of P3 billion given strong demand from investors.

During the listing ceremony, BPI president Cezar Consing said the P21.5 billion generated from the bond issue would go a long way in helping MSMEs, which get only 10 percent of loans given by Philippines but employ over 60 percent of the labor force.

Securities and Exchange Commissioner Ephyro Luis Amatong said the strong demand for the issuance did not only indicate the presence of ample liquidity in the financial system but likewise showed that investors were “responding well to environmental, social and corporate governance (ESG) investment opportunities.”

BPI Capital Corp. and HSBC Ltd. were the joint lead arrangers of the CARE bonds. BPI Capital is sole selling agent while HSBC is a participating selling agent.

The CARE bonds were issued as the third tranche of BPI’s P100-billion bond program. These bonds qualify as social bonds 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.

This initiative is part of the Ayala group’s comprehensive hand-holding program for about MSMEs. The group earlier launched the Ayala Enterprise Circle (AEC), touted as a “synergistic” initiative focused on helping SME partners continue their operations and recover from the pandemic.