Bank of Commerce seeks to secure P3B in first bond sale
Bank of Commerce (BankCom) is raising P3 billion in a debut bond sale to preserve margins at a time when monetary authorities are considering more aggressive interest rate hikes to cool inflationary pressures.
The lending arm of conglomerate San Miguel Corp. said the bonds would mature in two years and pay an annual yield of 5.0263 percent.
The offer, which has an oversubscription option, runs from July 11 to July 22, but BankCom reserves the right to shorten the sale period. Listing on the Philippine Dealing & Exchange Corp. is targeted for July 29.
BankCom said the bonds would help manage its interest earnings by matching the rates on its long-term assets and long-term funding. These would also reduce its interest rate risk, the lender explained in a Philippine Stock Exchange (PSE) filing on Monday.
Moreover, the bonds would diversify funding sources and provide money for other corporate expenses.
The offer would be the first series from a proposed P20-billion bond program, the disclosure showed.
The bank hired ING Bank N.V., Manila Branch and Philippine Commercial Capital Inc. (PCCI) as joint lead arrangers and joint bookrunners for the deal. BankCom is also acting as selling agent alongside ING and PCCI.
Upgrading of ATM fleet
BankCom, which traces its origins to Binondo, Manila with the establishment of Overseas Bank of Manila in 1963, now has a nationwide network of 140 branches and 261 automated teller machines (ATM).
It was one of eight companies that have successfully listed on the PSE this year, raising P3.36 billion in an initial public offering (IPO) last March.
The IPO proceeds would be used to fund the bank’s lending activities and finance capital expenditure requirements in connection with the upgrading of its ATM fleet and its core banking system.
BankCom said earnings hit a seven-year high in 2021 on better margins. Net income last year jumped 53 percent to P1.2 billion as net interest income rose 6 percent.
BankCom’s total assets stood at P206.38 billion as of the first quarter of 2022. During the period, loans and receivables reached P84.67 billion, a gain of over 16 percent versus the same period last year. INQ
