Union Bank upsizes bond offering to P11 billion

MANILA, Philippines — Union Bank of the Philippines of the Aboitiz family has more than doubled the volume of the first tranche of its P20-billion bond and commercial paper program due to strong demand.

UnionBank said in a disclosure to the Philippine Stock Exchange (PSE) it raised P11 billion from the bond offering from an initial size of P5 billion to accommodate additional demand from retail investors.

Jose Emmanuel Hilado, chief financial officer and treasurer at UnionBank, said the listed bank was encouraged by the results of its maiden peso bond offering.

“The proceeds of the bonds will help support our strategic business expansion plans, while providing a new shorter dated investment instrument to our institutional and retail clients. We thank our investors for their unwavering confidence in UnionBank.” Hilado said.

The two-year fixed rate bonds, which have a coupon rate of 7.061 percent per annum to be paid quarterly, were priced at 30 basis points over the two-year Bloomberg Valuation service (BVAL) government benchmark rate.                       

“This is at the lowest end of UnionBank’s indicative pricing guidance of 30 to 50 basis points that the bank communicated during a multi-city roadshow in Manila, Cebu, and Davao,” the bank said.

The bonds, to be issued and listed on the platform of the Philippine Dealing and Exchange Corp. (PDEX) on Dec. 7, are the first issuance under a P20 billion multi-tranche bond and commercial paper program.

The bank controlled by listed Aboitiz Equity Ventures Inc. (AEV) launched a P70 billion funding program last October consisting of offshore borrowings as well as domestic borrowings through the stock rights offering, issuance of long term negotiable certificates of deposits (LNTCDs), among others.