Security Bank raises P20B from peso bond market

Security Bank Corp. of tycoon Frederick Dy has raised P20 billion from the bond market as demand from lenders soared days before the Bangko Sentral ng Pilipinas (BSP) cut interest rates.

In a stock exchange filing on Tuesday, Security Bank said the issuance was its largest to date, coming from a base offer of P5 billion.

The bonds, which will mature in five years and one month, carry a yield of 6.05 percent per year. These were listed on the Philippine Dealing and Exchange Corp. (PDEx) on Tuesday.

READ: Robust lending buoys Security Bank’s earnings

“We’re grateful for their support and will strive to keep delivering value to our clients and stakeholders,” Arnold Bengco, Security Bank executive vice president, said in a statement.

According to the bank, it offered the bonds to diversify its funding sources and support its lending activities.

The country’s eighth-largest bank cut short its offering by a week as volume “significantly exceeded” its target.

This came days before the BSP eased its monetary policy after nearly four years.

It is typically advantageous for investors to buy bonds before interest rates are slashed as these would have more attractive yields versus bonds that are issued after rate cuts.

Security Bank tapped Philippine Commercial Capital Inc. (PCCI) as the sole bookrunner for the offer. PCCI likewise joined SB Capital Investment Corp. as joint lead arrangers and selling agents for the issuance.

READ: Security Bank raises $400M from five-year debt

The offering is one of a slew of bond issuances that began in June as banks became more optimistic due to anticipated rate cuts.

So far, PDEx has seen at least P266.4 billion worth of domestic bonds this year.

The bond platform aims to reach P400 billion by the end of the year, nearly doubling last year’s P209 billion.

Last month, Ayala-led Bank of the Philippine Islands raised P33.7 billion from the bond market, representing its largest thematic listing to date.

BDO Unibank Inc., the SM Group’s banking arm, also listed P55.7 billion in bonds from its third Asean sustainability bond issuance in July. —Meg J. Adonis INQ