MANILA, Philippines — Ayala-led Bank of the Philippine Islands (BPI) doubled the size of its bond issuance program to P100 billion as it intends to raise more funds to bankroll its expansion program and diversify its funding sources.
In a disclosure to the Philippine Stock Exchange (PSE), the bank said its board of directors approved an updated bond issuance program during its meeting yesterday.
“The issuance of bonds and commercial papers under the program shall be subject to market conditions and shall be determined by requirements of the bank’s business,” BPI said.
In September 2018, BPI launched a P50 billion bond and commercial paper program. The bank has raised half of the total amount after issuing P25 billion worth of fixed-rate bonds due 2020 in December 2018.
The 168-year old bank has been tapping both the onshore and offshore debt markets to raise funds to finance the expansion of BPI’s loan book.
Last month, it raised P3 billion from the issuance of long-term negotiable certificates of time deposits under a P50-billion program. LTNCTDs are peso-denominated certificates of time deposit with a minimum maturity of five years and are negotiable in the secondary market. Historically, it offers higher interest rates than regular deposits.
In the offshore debt market, the Ayala-led bank raised $300 million as it became the first Philippine bank to issue US dollar-denominated ASEAN green bonds.
It also yielded the lowest coupon and yield ever paid for a US dollar-denominated bond from the Philippines as well as the lowest credit spread ever paid by a Philippine bank.
The senior unsecured fixed rate ASEAN green bonds due September 2024 were priced at 99.641 with a re-offer yield of 2.577 percent. The bonds carry a coupon of 2.5 percent per annum, payable semiannually.
Likewise, BPI raised 100 million Swiss francs from its maiden ASEAN Green bond issuance to bankroll green eligible projects. The two-year bonds were priced at 100.040 percent with a re-offer yield of -0.020 percent, the first negative yielding bonds to be issued out of the Philippines in the international capital markets.
In September last year, it raised $600 million via the issuance of five-year senior unsecured fixed rate Regulation S notes with a coupon of 4.25 percent to lengthen the maturity of the bank’s borrowings.