UnionBank raises P18 billion from bond sale

MANILA, Philippines — Union Bank of the Philippines has raised P18.17 billion from the successful dual tranche offering of peso-denominated fixed rate bonds amid strong demand from investors.

“We are grateful for the support of our investors as their confidence in the bank allowed us to raise our largest peso bond issuance to date,” UnionBank treasurer and global markets head Johnson Sia said.

The issuance was UnionBank’s largest from its P50-billion bonds program.

Strong demand from both retail and institutional investors enabled the bank to upsize the issuance to over nine times its initial minimum offer size of P2 billion for the two tranches.

The listed bank raised P10.34 billion from the issuance of 1.5-year Series F bonds due 2025 with an interest rate of 6.5625 percent per annum.

It also raised another P7.83 billion via the issuance of new three-year Series G bonds due 2026 that carries an interest rate of 6.68 percent per annum.

Concurrent with the issuance of the new bonds, UnionBank also implemented the country’s first public non-sovereign bond exchange which extended to the holders of its P8.11 billion Series C bonds due Dec. 9, 2023 an option to sell to the exchangeable bonds in exchange for subscription to any of the new bonds.

The bank bought P236.7 million worth of Series C bonds with an interest of 2.75 percent.

The new bonds will be issued and listed on the Philippine Dealing & Exchange Corp. (PDEx) today.

“Fuelled by our passion to address the needs of our customers, we introduced the bond exchange program to provide a reinvestment option for existing investors,” Sia said.

ING Bank N.V., Manila Branch and Standard Chartered Bank served the joint lead arrangers, selling agents and bookrunners for the fund raising activity.

UnionBank earlier increased its bond program by 28 percent to P50 billion from P39 billion.

Proceeds of the bond program will be used to finance the migration of the acquired Citi consumer banking business, as well as continued enhancements of its digital channels and feature builds to accelerate its aspiration of becoming a leading consumer bank.

The earnings of UnionBank fell by 20 percent from January to September after taking a P3.6 billion hit from the integration of the consumer business of global banking giant Citi.