Union Bank raises Tier 2 notes issue to P7.2 B on strong demand

MANILA, Philippines - Union Bank of the Philippines (UBP) has upsized its Tier 2 notes issue from P5 billion to P7.2 billion due to strong demand from both institutional and retail investors.

UBP president and chief operating officer Victor B. Valdepeñas said the bank was pleased with the strong response of investors in the notes issue.

“The impressive pace surpassed our base offer target causing the need to increase our issue size. It is a vote of confidence in the sustainability and trust in our business,” he said.

The notes carry a coupon rate of 5.375 percent per annum and a tenor of 10 years and three months, with a call option after five years and three months.

“The primary purpose of the issuance is to increase and strengthen UBP’s capital base to support its expanding lending and investment businesses,” the bank executive added.

BDO Capital & Investment Corp. was tapped as issue manager, lead underwriter and selling agent for the transaction.

UBP also acquired the services of China Banking Corp. as underwriter and selling agent, Multinational Investment Bancorporation as market maker and selling agent.

Deutsche Bank AG Manila undertook investor services as registrar and paying agent, while the trust department of the Development Bank of the Philippines acted as public trustee.

Early this year, UBP went to the capital markets to raise P5.04 billion to ensure compliance with the Basel III and Bangko Sentral ng Pilipinas (BSP) requirements.