BPI eyes $150 million syndicated loan

MANILA, Philippines — Ayala-led Bank of the Philippine Islands (BPI) is eyeing at least $150 million through a syndicated loan to partially finance its maturing foreign obligations this year and next year.

BPI chief finance and sustainability officer Eric Luchangco told reporters on the sidelines of the “Green and Beyond Sustainability Fair” over the weekend that the bank has tapped British banking giant HSBC and Standard Chartered Bank a few weeks ago as main arrangers of the syndicated loan.

“We launch the issue already and we are pushing through with it. So basically, I think we are looking at $150 million with the potential upsize,” Luchangco said.

Loan syndication occurs when a borrower requires an amount that is too large for a single lender and multiple lenders pool together and form a syndicate to provide the borrower with the requested capital.

“We have our lead banks on that, HSBC and Standard Chartered. And so it’s in the process right now, we just did a call with potential syndicate banks that would join as well,” Luchangco said.

The 171-year-old bank earlier decided to shelve its planned return to the offshore debt market, and is instead looking at a syndicated loan to refinance its maturing foreign-denominated bonds.

BPI has a maturing foreign debt of $600 million in September this year and another $300 million due in September next year.

“Basically, we have some available funds so we don’t need to raise the whole amount,”

BPI last tapped the offshore bond market in August 2019 when it issued 100-million-Swiss franc denominated ASEAN green bonds.

The bank announced the planned foray into the international debt market late January 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).

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.

Meanwhile, BPI consumer banking head Ginbee Go said the bank continues to ramp up its financial inclusion and digitalization initiatives as 60 percent or 5.6 million of its 9.6 million clients are already enrolled in digital channels.

“Our target is eventually to swing it from 60 percent. Our target this year is to enroll 70 percent. But really our focus right now is more on the usage of the digital channel,” Go said.

Go explained that three million of the 5.6 million digitally enrolled customers do 50 percent of their transactions digitally.

According to Go, the number of clients that have opened a bank account digitally now account for 43 percent of new clients, or almost tripled compared to last year.

“By leveraging technology and partnerships, we will work towards bridging the gap and ensuring that more Filipinos have access to inclusive and sustainable financial services in our pursuit of sustainability,” she said.

BPI, she added, is targeting two million new customers this year as many clients still go to branches despite its ongoing rationalization.

“We believe that access to financial services and digital solutions is vital for fostering economic progress and empowering communities,” Go said.