Strong demand prompts BDO to close bond sale early

MANILA, Philippines  —Bond investors swamped the latest offer of Sy-led banking giant BDO Unibank Inc. in a bid to lock in higher interest rates ahead of potential rate cuts later this year.

This prompted BDO to close the offer period for its Asean Sustainability Bond nearly a week ahead of schedule.

“The offer was backed by strong demand from both retail and institutional investors, hence the decision to close the offer period a week earlier than the original schedule of January 22, 2024,” BDO said in a stock exchange filing on Monday.

The Philippine peso-denominated sustainability bonds have a coupon rate of 6.025 percent and are due in 1.5 years. The settlement date is set for Jan. 29, 2024.

READ: BDO returns to bond market, sets P5-B Asean sustainability debt sale

BDO earlier said it was raising at least P5 billion from the bond sale, its second using the sustainability bond framework.

BDO generated P52.7 billion from its maiden Asean sustainability bond sale two years ago after raising the offer size from the original P5 billion.

“The net proceeds of the issuance are intended to diversify the bank’s funding sources, and finance and/or refinance eligible assets as defined in the bank’s sustainable finance framework,” BDO said.

READ: BDO 9-month 2023 income up nearly 35% to P53.9B

According to the Securities and Exchange Commission, proceeds from the sustainability bonds will be used to finance environment and social projects.

Standard Chartered Bank was hired as the sole arranger of the proposed issuance, with BDO Unibank, Inc. and Standard Chartered Bank acting as selling agents. BDO Capital and Investment Corp. was tapped as financial advisor to the deal.