BPI secures P33.7B from blockbuster bond sale

RECORD Ayala-led Bank of the Philippine Islands raised P33.7 billion from its sustainability-linked notes issuance, its largest thematic bond listing to date. The issuance was oversubscribed by nearly seven times from its initial size of P5 billion. –PHOTO COURTESY OF BPI

Ayala-led Bank of the Philippine Islands (BPI) has listed P33.7 billion worth of IOUs in the debt market—its largest thematic bond listing to date—as strong demand pushed it to upsize its offer by more than 500 percent.

BPI on Friday said robust demand from institutional, high net worth and retail clients bloated the final issue size from the original P5 billion. The country’s second largest private bank cut its offer period by a day due to high demand.

READ: BIZ BUZZ: More BPI bond offers in the works

The so-called sustainable, environmental and equitable development (SEED) bonds, which have a term of 1.5 years bearing an interest rate of 6.2 percent, are part of the bank’s P100-billion bond program that was approved in May 2022.

“The net proceeds of this issuance will be directed toward the financing or refinancing of eligible green or social projects,” BPI treasurer Dino Gasmen said during the listing ceremony.

Under BPI’s Sustainable Funding Framework, proceeds from a green bond offer must only be used for sustainability-related projects, such as the development of power plants. Unused proceeds cannot be tapped for other purposes.

ESG awareness

BPI Capital Corp. and Standard Chartered Bank were the joint lead arrangers and selling agents of the offer.

Asked why there was high demand for the issuance, Gasmen told reporters that more investors were becoming “more aware” about environment, social and governance (ESG) issues.

READ: BPI promises 6.2% yield for fresh green bonds

”There are opportunities on the investors’ side. If they are going to invest in a bond, they want to invest in [those linked to] ESG,” he added.

Analysts previously said that purchasing BPI’s bonds, scheduled before the planned interest rate cut, would be beneficial for investors, as they would be given “above-market rates,” and therefore better yields.

BPI officials had said they wanted to launch at least one sustainability-linked bond every quarter, especially after seeing high demand for the SEED bonds.