BPI upsizes initial tranche of P50 billion bonds

MANILA, Philippines — Ayala-led Bank of the Philippine Islands (BPI) intends to raise as much as half of its P50-billion bond and commercial paper program due to strong demand.

BPI informed the Philippine Stock Exchange its board of directors on Thursday approved to increase the cap of the fund raising activity to P25 billion from the P15 billion approved on Oct. 17.

“Noting strong investor demand from the bookbuilding, the board of directors increased the approved maximum size of the initial issuance to P25 billion,” BPI said.

BPI announced last Sept. 19 it was tapping the onshore debt market via a P50-billion peso bond and commercial paper program.

The country’s fourth largest bank controlled by conglomerate Ayala Corp. has been undertaking a series of fund raising activities tapping both offshore and onshore debt markets.

It raised P50 billion via a stock rights offer last May and another $600 million in August as part of an initial drawdown of its $2 billion medium term note program. This was the largest ever debt issuance by a Philippine bank in the offshore debt market.

BPI has been diversifying its funding sources and lengthening the maturity profile of its borrowings.

The 167-year old bank booked an 11.5 percent increase in earnings to P5.98 billion in the third quarter from P5.36 billion in the same quarter last year, reversing the decline in the first and second quarters.

This brought the nine-month profit growth to P17.01 billion this year, almost unchanged from P17.05 billion in the same period last year, as revenue climbed 7.3 percent to P56.89 billion while operating expenses rose 15.2 percent to P32.08 billion.

Moody’s Investors Service has reaffirmed its Baa2 rating, a notch above the minimum investment grade, and stable outlook on BPI.

More banks are now shifting to the issuance of bonds and commercial papers instead of long term negotiable certificates of deposits (LTNCDs) after the Bangko Sentral ng Pilipinas (BSP) released the enhanced guidelines for the fund raising activity.