BPI raises record $600 million from maiden notes issuance

MANILA, Philippines — Ayala-led Bank of the Philippine Islands (BPI) has raised $600 million, the largest ever debut issuance for a Philippine bank in the offshore debt market, via the issuance of unsecured fixed rate notes to lengthen the maturity of the bank’s borrowings.

BPI president and CEO Cezar Consing said the maiden notes issuance of the 167-year old bank was well received by investors.

 “The success of our first ever issuance of the notes is a reflection of investor confidence in the credit strength of BPI. It allows us to diversify our sources of liquidity, lengthen the maturity profile of our borrowings, and manage the growth of our balance sheet more efficiently,” Consing said.

The fund raising activity that forms part of the BPI’s $2 billion medium note program was about three times oversubscribed, with the order book allocated predominantly to Asia and the rest to Europe.

More than half of the offer allocated to asset managers and fund managers, around one-third to banks, and the rest to insurance and pension funds, and private banks and other investors.

“We are grateful for the support we have received from a broad range of high quality investors,” Consing said.

The country’s third largest bank in terms of assets continues to pursue initiatives to maximize flexibility in accessing offshore funding.

The five-year senior unsecured fixed rate Regulation S notes fetched a coupon of 4.25 percent and will be listed on the Singapore Stock Exchange.

BPI Capital Corp. acted as the sole global coordinator, while Deutsche Bank, HSBC, and JP Morgan served as joint lead managers and bookrunners for the drawdown.

BPI’s asset base booked a double-digit growth of 10.4 percent to P1.91 trillion as of end March, while its capital rose by 10.3 percent to P189.54 billion. This translated to a capital adequacy ratio of 13.55 percent and a common equity tier-1 ratio of 12.65 percent.

The listed bank has raised P50 billion from a stock rights offering to fund its growth strategy.

Earnings of BPI slipped 5.7 percent to P11.03 billion in the first half of the year from P11.7 billion in the same period last year due primarily to reduced non-interest income arising from lower trading gains.

Total revenues went up 5.44 percent to P37.22 billion in the first six months from P35.3 billion in the same period last year driven by strong growth in net interest income.