MANILA, Philippines — Ayala-led Bank of the Philippine Islands (BPI) is not pushing through with its planned return to the offshore debt market, and is instead looking at a syndicated loan to refinance its maturing foreign-denominated bonds.
According to BPI treasurer Dino Gasmen, BPI may opt to tap a group of lenders to partially refinance its foreign debt set to mature this year and next year.
“We’re going to refinance that maturity partially, but it won’t be a public issuance. We’re going to do it via a syndicated loan,” Gasmen said in a press conference after the bank’s annual stockholders’ meeting.
BPI has a maturing foreign debt of $600 million in September this year and another $300 million due in September next year.
“We’re going to refinance less, just a portion. We have the extra funds to pay off the entire debt,” Gasmen explained.
The bank last tapped the offshore bond market in August 2019 when it issued 100-million-Swiss franc denominated ASEAN green bonds.
According to Gasmen, the certainty of it refinancing is better via a syndicated loan because a bond issuance is subject to market conditions.
“As we know, conditions right now are very volatile in financial markets,” Gasmen pointed out.
The planned foray into the international debt market was announced late January by the 171-year old bank after listing P20.3 billion worth of peso fixed rate bonds at the Philippine Dealing and Exchange Corp. (PDEx).
The proceeds of the issuance of BPI Reinforcing Inclusive Support for MSMEs Bonds (BPI RISE Bonds) due 2024 early this year will be used by the bank to boost its lending portfolio for micro, small, and medium enterprises (MSMEs).
Gasmen said BPI has no plan to tap the domestic bond market for additional funds this year.
“On the peso side, I don’t think we’ll add any this year,” Gasmen said.
In May last year, BPI established a new P100 billion bond and commercial paper program after using up its previous P100 billion borrowing program established in late 2019.