Union Bank raising $1.5 billion from offshore debt market

MANILA, Philippines — Aboitiz-led Union Bank of the Philippines is returning to the offshore debt market to raise as much as $1.5 billion to meet its financing needs amid the COVID-19 pandemic.

The bank doubled its medium-term note program to $2 billion from $1 billion when it was established in November 2017.

Union Bank last tapped the offshore debt market almost three years ago when it raised $500 million through the issuance of five-year senior notes maturing on November 2022.

“With the updated program, the bank may from time to time issue, offer and sell the remaining balance of the notes in the aggregate amount of up to $1.5 billion or its equivalent in other currencies,” Union Bank said.

The Aboitiz-led bank said in a disclosure to the Philippine Stock Exchange the notes would be issued in such form, amount, currency, tenor, number of tranches, at such interest rate, and under such other terms and conditions as the bank may subsequently determine or approve.

“Details regarding each issuance or each tranche shall be disclosed at the appropriate time,” it said.

Union Bank has been raising funds through the onshore and offshore debt markets to diversify its funding sources and finance its expansion program over the past few years.

In the first half of the year, Union Bank hiked its provision for impairment losses to P6.99 billion in anticipation of the potential impact of the COVID-19 pandemic on its loan book. The amount was more than 19 times the P364 million it allocated for loan losses in the same period last year.