Bank of Commerce raising P5B from bond foray

MANILA, Philippines — Bank of Commerce (BankCom) has launched its P5-billion bond program amid expectations that the Bangko Sentral ng Pilipinas (BSP) will further cut interest rates this year.

In a stock exchange filing on Tuesday, the banking arm of conglomerate San Miguel Corp. said the offer would consist of Series C bonds due 2027 at a fixed rate of 6.1942 percent per annum, and Series D bonds due 2030 at 6.3494 percent.

The offer period will run from Jan. 28 to Jan. 30, while listing on the Philippine Dealing and Exchange Corp. is scheduled on Feb. 19, according to BankCom.

READ: Lending boosts BankCom bottom line by 56%

Lenders can invest a minimum amount of P100,000 with increments of P50,000.

This represents the third tranche of the bank’s P50-billion bond program that was upsized from P20 billion originally.

BankCom raised P7.5 billion in the first tranche in July 2022, and P6.57 billion in the second tranche last May 2024.

“Proceeds from the issuance will be used for management of the bank’s balance sheet, diversification of funding sources, and general corporate purposes,” BankCom said in its disclosure.

ING Bank NV Manila Branch, Philippine Commercial Capital Inc., Security Bank Capital Investment Corp. and Standard Chartered Bank were tapped as joint lead arrangers for the issuance, as well as selling agent, along with BankCom.

This comes amid projections that the BSP will slash the rates for overnight borrowing by up to 50 basis points this year.

Rate cuts typically make bond offers more attractive, as these promise higher yield for investors.

BankCom’s net income in the first nine months of 2024 jumped by 10 percent to P2.2 billion as its core lending business grew. Net interest income was up by 11 percent.

It also saw an uptick in its service charges, fees and commissions on the back of revenues from its investment banking, credit card and trust businesses.—Meg J. Adonis INQ