AUB, UnionBank raising P50 B via bond offerings

MANILA, Philippines — Listed banks Asia United Bank (AUB) and Union Bank of the Philippines are tapping the onshore debt market through the issuance of bonds worth about P50 billion.

The Rebisco Group-led AUB said in a disclosure to the Philippine Stock Exchange (PSE), the bank’s board of directors has approved a P30-billion bond program.

“The terms, details and timing will be set by the management,” AUB said.

The bank earlier reported a 63 percent surge in net income to P2.6 billion in the first half amid the 25 percent increase in net interest income to P4.5 billion due to a combination of higher lending rates and volume.

AUB president Manuel Gomez earlier said the bank is bullish with the growth exhibited for the past six months.

“Our customers’ continued patronage to all our core services has helped boost AUB Group’s total assets, and this is something that we will continue to improve on year on year,” Gomez said.

On the other hand, the Aboitiz-led UnionBank said in a separate disclosure its board of directors approved the issuance of up to P20 billion in unsecured subordinated debt eligible as Tier 2 capital.

The country’s 9th largest bank in terms of assets said the funds raising activity would have to be approved by the Bangko Sentral ng Pilipinas (BSP).

At the same time, UnionBank is set to voluntary redeem P7.2 billion unsecured subordinated debt eligible as Tier 2 capital ahead of the scheduled maturity on 2025 to save on interest payments.

Last October, the bank launched a P70-billion funding program 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.

Last May, the bank raised P5.8 billion via the issuance of three-year peso-denominated bonds after raising P11 billion from the issuance of two-year fixed-rate bonds in December. These were part of the bank’s P50-billion bond or commercial paper program.

Banks have been tapping the onshore debt market by shifting to bonds or commercial papers instead of long-term negotiable certificates of deposits (LTNCDs) after the BSP approved the guidelines facilitative an alternative source of funding.

Latest data from the Philippine Dealing and Exchange Corp. (PDEX) showed banks have so far raised P165.72 billion and accounted for about 68.3 percent of the total P242.64 billion fresh funds raised by companies in the bond market.