BDO raises $300M through 5-year bonds

MANILA, Philippines—Banco de Oro Unibank, the country’s largest bank,  has raised $300 million in fresh funds for expansion from the sale of five-year bonds in the overseas market.

The issuance of fixed-rate senior notes due 2017, which marked BDO’s return to the offshore bond market for the first time in nearly two years, carried a coupon rate of 4.5 percent and a yield-to-maturity of 4.625 percent per annum.

“We are delighted with the outcome. The orders for our issue built up rapidly and we decided to close the books early and to take advantage of the interest our issue generated, given the volatility of current markets,” Pedro Florescio III, BDO executive vice president and treasurer, said in a press statement on Wednesday.

The disclosure said proceeds of the senior notes would support the bank’s business expansion plans and re-lending activities.

UBS acted as sole bookrunner for the issue while BDO Capital & Investment Corp. was the joint lead manager.

With this issuance, BDO is seen to be taking advantage of compelling interest rates and strong appetite for emerging market assets to generate more funds for lending. On the other hand, the five-year tenor is currently the “sweet spot” in the global bond market.

These senior notes will represent direct, unsecured obligations of BDO and were sold through a book-building process to both international and local investors under the “Reg S” format, which means that the securities were sold to global investors outside the United States.

The last time that BDO forayed into the overseas bond market was in October 2010 when it issued $300 million worth in bonds due 2016 at a coupon rate of 3.875 percent.

BDO, led by the family of tycoon Henry Sy, Sr., is the country’s leading bank in terms of resources amounting to about P1 trillion. It has one of the largest distribution networks, with more than 740 o branches and more than 1,500 ATMs nationwide.