Ayala-led Bank of the Philippine Islands (BPI) has rolled out a new offering of two-year bonds at an interest rate of 2.8068 percent per annum, aiming to generate at least P5 billion to settle older debt and invest in digitalization initiatives.
This is the fourth tranche of peso-denominated fixed-rate bonds under BPI’s P100-billion bond program, as approved by its board of directors in late 2019.
While the base offer is P5 billion, BPI has the option to upsize the offering, which began on Jan. 6 and will run until Jan. 21 this year.
The bonds will be paid quarterly, with a minimum investment amount of P1 million and additional increments of P100,000.
BPI Capital Corp. and The Hongkong and Shanghai Banking Corporation Ltd. (HSBC) are the joint lead arrangers. BPI Capital is the sole selling agent, while HSBC is a participating selling agent.
General corporate purposes
Dino Gasmen, BPI treasurer, said proceeds from this offering would be used for general corporate purposes, including refinancing.
“BPI will continue to invest in digital banking capabilities to better serve its customers,” he added.
“Digitalization will enable our branches to provide more meaningful interactions to address the increasingly complex financial needs of our clients. We are confident and hopeful that investors will continue to support our fund-raising initiatives,” Gasmen said.
In its prospectus, BPI reported an increasing shift in customer behavior from transacting in person at a physical location to transacting online amid the pandemic. As of end-September 2021, 91 percent of BPI’s total transactions were done via digital platforms and only 9 percent through in-branch transactions.
As the bank continues to make significant investments in digitalization, it intends to rationalize its branch footprint.
BPI believes that digitalization will enable its branches to provide more meaningful interactions that address the increasingly complex financial needs of its clients. It said digital banking and branch banking could exist side by side, providing different purposes for each customer.
Although some clients still prefer discussing their financial needs face-to-face, BPI said digital banking could accord clients more choices and greater control of their interactions with the bank.
“The bank believes that ‘phygital,’ a combination of physical and digital banking, is the future of the banking distribution network,” the prospectus said.