Investors swarm UnionBank’s pioneering P11 billion digital bonds

MANILA, Philippines — Aboitiz-led Union Bank of the Philippines has raised P11 billion after investors swarmed the first-ever digital peso bond issuance in the country.

This developed as the bank extended the term of UnionBank president and CEO Edwin Bautista for another three years.

The fund raising activity, part of the bank’s P39 billion bond program, was oversubscribed as it originally pegged the size at P1 billion.

The first digital bond issuance in the Philippines was a result of UnionBank’s partnership with the Phil. Depository and Trust Corp. (PDTC).

The bonds with a tenor of 1.5 years and a fixed rate of 3.25 percent per annum will be listed on the Philippine Dealing & Exchange Corp. (PDEx) today.

Jose Emmanuel Hilado, chief finance officer and treasurer at UnionBank, earlier said that the proceeds of the fund raising activity would be used for debt liability management.

“No direct use of proceeds, it’s more for liability management,” Hilado said.

Earlier, the major shareholders of UnionBank, as well as institutional and retail investors infused P40 billion in fresh equity through a stock rights offering (SRO) where it issued approximately 617.2 million common shares priced at P64.81 per share.

According to the bank, the offering garnered strong participation from existing investors led by Aboitiz Equity Ventures (AEV), pension fund manager Social Security System (SSS), and Insular Life Assurance Company Ltd.

The listed bank intends to use the proceeds from the fund raising activity to partially fund the acquisition of the consumer banking business of global banking giant Citi in the Philippines.

Last December, UnionBank said it was spending P55 billion for the acquisition of Citi’s retail banking business in the country. The amount includes the net asset value amounting to P9.7 billion and the premium of about P45.3 billion.

Meanwhile, the bank’s board of directors approved and confirmed the extension of Bautista’s term until end December 2025. He was first appointed as the president in 2016 and CEO in 2018.

Bautista was responsible for starting the bank’s digital transformation six years ago and has successfully put UnionBank’s name on the global digital map.

Bautista, a former Citibanker, was also the driving force behind the acquisition the consumer banking business of American banking giant Citi in the Philippines.

The publicly held bank also promoted 74 executive officers led by UnionBank chief customer experience officer and chief digital channel officer Ana Aboitiz-Delgado to senior executive vice president from executive vice president.