BDO to float P3 B in new debt notes

MANILA, Philippines – The country’s largest bank, Banco de Oro Unibank, expects to raise  P3 billion from the sale of additional debt paper qualifying as Tier 2 or supplementary capital later this month, boosting funds for expansion.

In a disclosure to the Philippine Stock Exchange on Tuesday, BDO said the proposed Tier 2 notes would have a tenor of 10 years and three months.  The bank has the option to redeem the notes in the fifth year.

“The additional Tier 2 notes will be used to supplement the bank’s capital position and support its business expansion plans,” the disclosure said.

This will be BDO’s second time to sell Tier 2 notes this year following the issuance of P8.5 billion worth of similar instruments last June. The bank obtained approval from the Bangko Sentral ng Pilipinas to issue a total of P15 billion worth of Tier 2 notes.

The offering will be held from September 20 to 30 while the issue date is October 7.  The indicative coupon rate will be finalized at the end of the offer period based on the prevailing 10-year PDST-F benchmark.  Individual investors will be tax-exempt if the notes are held for more than five years.

“BDO reserves the right to upsize the issue and adjust the timing and terms of the offer as needed,” the disclosure said.

The bank has mandated Deutsche Bank, HSBC and Standard Chartered as lead arrangers for the offering while BDO Private Bank and Multinational Investment Bancorporation will be selling agents.