BPI cuts offer period for hit ‘green’ bond offer
MANILA, Philippines — Bank of the Philippine Islands has shortened the offer period for its P5-billion sustainability-linked bond offer. BPI cited as reason a “strong and substantial” demand from investors.
In a stock exchange filing on Friday, the Ayala-led bank said the debt offer would run only until Monday, May 26. It was originally set to end on May 30.
According to the country’s second-largest private bank, high demand was seen across institutional, high net worth and retail clients.
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“The bank expresses its gratitude for the investing public’s strong support of the offer,” BPI said in its disclosure.
The bonds have a tenor of one and a half years. They represent the first tranche of BPI’s P200-billion bond and commercial paper program approved in October 2024. These will be listed on the Philippine Dealing and Exchange Corp. on June 10.
The notes were priced at 5.85 percent per annum. This is above the current interest rate benchmark based on Philippine Bloomberg Valuation for a tenor of 1.5 years, which averaged 5.771 percent.
Under the bank’s sustainability funding framework, the proceeds of the offer must only be used to support sustainability-related projects. Examples are renewable energy power plants and for clean water and sanitation. Unused proceeds cannot be spent for other purposes.
Easing policies
BPI’s debt issuance also comes at a time when the Bangko Sentral ng Pilipinas is easing its monetary policy. The BSP intends to spur consumer spending. So far, the central bank has reduced rates by 25 basis points this year to 5.5 percent.
Rate cuts typically make fixed-income securities like bonds more attractive to investors. These carry a higher yield, and, therefore, a higher return. These also heighten demand for loans.
In the January to March period, strong lending in the consumer and micro, small and medium enterprise segments buoyed the net income of BPI by 9 percent to P16.6 billion. This represents its highest first-quarter bottom line in history.
BPI president TG Limcaoco earlier said they were poised to exceed their 2024 record-high net income of P62 billion. Limcaoco cited a projected 12- to 13-percent increase in loan growth this year.
