Landbank eyes biggest bond sale ever

FILE PHOTO

MANILA, Philippines — Land Bank of the Philippines (Landbank) plans to soon tap the debt market in a bid to raise as much as P50 billion in fresh capital, in what could be the state-run lender’s biggest bond issue.

Speaking to reporters on the sidelines of an event organized by the Financial Executives Institute of the Philippines on Wednesday, Lynette Ortiz, company president and CEO, said Landbank planned to issue bonds as early as the last quarter of 2024 to take advantage of a projected decline in interest rates.

Proceeds from the mammoth offering would be used to fund various loan programs, Ortiz said, adding that Landbank’s priority is to sell the debt securities to domestic creditors.

“Our first priority is to get to the debt capital markets. We want to issue bonds,” she said, adding that such a fundraising activity would be a “good balance sheet management.”

Infusion into Maharlika fund

Figures showed LandBank netted P12 billion in the first three months of 2024, marking an 11-percent increase year-on-year. That surpassed the bank’s profit target of P11.3 billion for the period by 6 percent, which the lender attributed to increased interest income from loans

The upcoming debt offer would come on the heels of Landbank’s massive capital infusion to Maharlika Investment Fund, the country’s first sovereign wealth fund.

READ: Landbank releases P50 B as share in Maharlika Investment Fund

On the timing of the planned bond float, Ortiz said Landbank was hoping to lock in cheaper rates as it monitors the signals from the Bangko Sentral ng Pilipinas, which is expected to start easing monetary policy in August this year.

Landbank is pushing for amendments to its charter, which would include an increase in its authorized capital stock to P1 trillion, from the current P800 billion.

The proposed capital hike, in turn, would pave the way for Landbank’s stock market debut. Ortiz said the bill that would tweak LandBank’s charter still needs to be tackled in the Senate, adding that she’s hoping that the draft legislation would be enacted into law this year.

“We’re hoping we can do it (bond sale) this year, but certainly by Q1. And then the equity capital markets, perhaps next year,” she added. INQ