DBP’s P6.5-B issue gets positive investor feedback

MANILA, Philippines - State-run Development Bank of the Philippines (DBP) said it has received positive feedback from investors for its P6.5-billion unsecured subordinated debt Lower Tier 2 (UnSD-LT2) capital raising program.

The bank said since it announced its plan to issue the debt papers, it has been receiving overwhelming response from investors.

“The previous UnSD-LT2 holders, along with new investors, have expressed interest in investment outlets including new DBP issuances,” it said.

On Sept. 2, 2013, DBP exercised its call option on the UnSD-LT2 it issued on Sept. 1, 2008 with a coupon rate of 7.75 percent per annum.

DBP said it is currently processing the issuance of an instrument that is compliant with the new Basel III Implementing Guidelines on Minimum Capital Requirements issued by the Bangko Sentral ng Pilipinas early this year  and which will take effect on Jan. 1, 2014.

Consistent with its standing as a leading development financial institution in the region, DBP received this year various international awards and recognitions for its programs and credit standing.

These include the following: Certificate of Merit for the Philippine Water Revolving Fund, awarded during the Global Sustainable Finance Awards held in Germany last July by the European Organization for Sustainable Development; Most Outstanding Infrastructure Project for the Connecting Rural Urban Intermodal System Efficiency Program, awarded by the Association of Development Financing Institutions in Asia Pacific.

It also got an affirmation from Fitch Ratings in May this year of its BB+ rating based on the bank’s stable deposit basis, satisfactory liquidity, high core capitalization, and rising loan reserves.

Standard and Poor’s also upgraded DBP’s long-term issuer credit rating from BB+ to BBB-, with a stable outlook.

S&P also raised the bank’s short-term issuer credit rating from B to A-3.

These upgraded ratings followed the upgrade of the Philippine government, with Standard and Poor’s stating in its report that “the ratings on DBP are equalized with the sovereign credit ratings of the Philippines.”

As one of the country’s largest banks, DBP plays a critical public policy role in supporting the economic and social development of the Philippines and has an integral link to the government.

DBP registered a 46-percent increase in its net income for the first half of 2013 to P2.8 billion, from P1.9 billion in the same period last year.

The bank’s gross loan portfolio and deposit levels registered double-digit gains as improvement in efficiency ratio contributed to higher return on equity at 14 percent. Its capital adequacy ratio further rose to 23.9 percent from 21.6 percent.