Robinsons Bank to issue P5 B bonds

MANILA, Philippines — Robinsons Bank, the financial services arm of the JG Summit Group of taipan John Gokongwei, is raising as much as P5 billion from a bond offering  to strengthen its long-term funding position.

The base size of the proposed bond offering is P2.5 billion, with an option to upsize by another P2.5 billion.

The bond issue was assigned a rating of PRS Aa minus by the Philippine Rating Services Corp. with a Stable Outlook.

Obligations rated “PRS Aa” are of high quality, and are subject to very low credit risk.  The obligor’s capacity to meet its financial commitment on the obligation is very strong.  The minus further qualifies the issue rating.  

A Stable Outlook, on the other hand, is defined as “the rating is likely to be maintained or to remain unchanged in the next 12 months.” 

Robinsons  Bank was the 18th largest bank with assets of P120.8 billion as of the end of March. The bank’s distribution network consisted of 146 branches and 294 ATMs.  Its subsidiary, Legazpi Savings Bank, had 16 and 18 branches and ATMs, respectively as of the same period.

In assigning the rating, Philratings considered the bank’s support from shareholders, its well-experienced management, growing banking franchise and modest profitability.  

The rating also took into account the Philippine economy’s continued growth, which is expected to benefit the domestic banking industry.  

The JG Summit Group is one of the largest and most diversified Philippine conglomerates, with substantial business interests in foods, agro-industrial and commodities, real estate and hotel, air transportation, banking and petrochemicals.  

“The diversity, market and financial strength of the JG Summit Group present Robinsons Bank with numerous opportunities, with the substantial size of the group providing a captured market for the bank’s various products and services.  Additionally, Robinsons Bank’s shareholders have demonstrated their strong financial support to the bank through recent capital infusions totaling P9.1 billion,” Philratings said.

Retail funds accounted for a significant portion of Robinsons Bank’s funding base for 2014-2018.  Current and savings accounts, which are considered more stable and low-cost deposits, represented the bulk of deposits, with a share of 77.9 percent as of the end of the first quarter.

Similar to its peers, Robinsons Bank has started to tap institutional funds, through long-term negotiable certificate of deposits and bond issuances.