Security Bank eyes P50 billion from peso-bond issuance

MANILA, Philippines — Listed Security Bank Corp. is raising as much as P50 billion as it joined the growing list of Philippine banks issuing peso-denominated bonds to support growing lending activities and diversify funding sources.

Security Bank said in a disclosure to the Philippine Stock Exchange (PSE) its board of directors approved the establishment of the peso-denominated bond program last Friday.

Security Bank executive vice president and treasurer Raul Pedro said in a text message to The STAR proceeds of the fund raising activity would support the bank’s future lending activities and diversify its funding sources.

“It is a program of up to P50 billion and will only be fully maximized depending on future requirements,” Pedro said.

Security Bank president and chief executive officer Alfonso Salcedo earlier said the financial institution intends to tap both the onshore and offshore debt markets anew next year.

“Definitely nothing for the rest of the year, next year we haven’t decided yet. If we need more funding sources, we will issue some more,” Salcedo said.

Last September, Security Bank tapped the offshore debt market and raised $300 million through the issuance of five-year senior unsecured fixed rate notes under a $1 billion medium term note program to extend its term liabilities and diversify its investor and funding base.

The fund raising activity was 3.7 times oversubscribed as orders reached $1.1 billion. Proceeds of the notes would be used to extend term liabilities, expand funding base, improve liquidity gaps, to fund investment and other general corporate purposes.

Security Bank may no longer issue another tranche of long-term negotiable certificates of deposits (LTNCDs) after receiving an approval from the Bangko Sentral ng Pilipinas (BSP) to raise up to P20 billion in October last year.

It so far raised P5.78 billion during the first tranche of the fund raising activity last May to help the bank manage its liabilities and ratios, while also expanding their funding and investor base.