PSBank offers 2-year debt paper at 5.875%

MANILA, Philippines – Philippine Savings Bank (PSBank) returned to the domestic debt market on Monday, aiming to raise at least P2 billion to bankroll its expansion plans.

In a stock exchange filing on Monday, the thrift banking arm of the Metrobank Group said the bonds would mature in two years and carry a yield of 5.875 percent a year.

Investors may pitch in a minimum P100,000 with additional increments in multiples of P10,000.

READ: PSBank nets P1.21B in Q1, driven by consumer lending

The notes will be offered from Aug. 4 to Aug. 8. They will be issued and listed on the Philippine Dealing and Exchange Corp. on Aug. 18.

“Net proceeds will provide the bank with access to long-term funding to support its expansion initiatives and further diversify its funding sources,” PSBank said in a statement.

First Metro Investment Corp. and ING Bank NV Manila Branch were tapped as the arrangers for the issuance. PSBank, First Metro, ING and Metropolitan Bank and Trust Co. are the selling agents.

This represents the third tranche of PSBank’s P40-billion bond program. It raised P6.3 billion in the first tranche in July 2019 and P4.65 billion in the second tranche in February 2020.

PSBank’s return to the domestic bond market comes amid the Bangko Sentral ng Pilipinas’ monetary policy easing cycle. Rate cuts typically make fixed-income securities like bonds more attractive due to their higher yield to investors.

Last month, Philippine Rating Services Corp. said PSBank had maintained its issuer credit rating of PRS Aaa (corp.) with a stable outlook, implying that it had a “very strong” capacity to meet its financial obligations.

The stable outlook also signifies that PSBank is likely to retain this rating for the next 12 months.

Strong lending buoyed the first-quarter net income of PSBank by 1 percent to P1.21 billion. Core revenues rose by 9 percent to P3.81 billion.

According to the bank, consumer loan demand was relatively high due to improving macroeconomic conditions, which boosted the spending power of consumers.