BDO to tap offshore bond market

MANILA, Philippines—Banco de Oro Unibank plans to tap the overseas bond market for the first time in two years, seeking to take advantage of compelling interest rates and strong appetite for emerging market assets.

BDO disclosed to the Philippine Stock Exchange on Monday a proposal to issue US dollar fixed-rate senior notes and the mandate given to Swiss investment bank UBS to act as sole bookrunner and joint lead manager.

Banking sources expect BDO to start offering notes within this week, noting that the tenor could be five years because this was the “sweet spot” of global investors at present. The offer size is not yet known as of press time.

These senior notes will represent direct, unsecured obligations of BDO and will be sold through a bookbuilding process to both international and local investors under the “Reg S” format, which means that the securities will be sold to global investors outside the United States.

“Proceeds of the senior notes are intended to be used by the bank for general funding and re-lending purposes,” the disclosure said.

BDO Capital and Investment Corp. will act as joint lead manager for the issuance.

The last time that BDO forayed into the overseas bond market was in October 2010 when it issued $300 million worth of bonds due 2016 at a coupon rate of 3.875 percent.

BDO, led by the family of tycoon Henry Sy Sr., is the country’s largest bank in terms of resources amounting to about P1 trillion. It has one of the largest distribution networks, with more than 740 operating branches and more than 1,500 ATMs nationwide.