BPI raising P3 billion from COVID response bond issue

MANILA, Philippines — Ayala-led Bank of the Philippine Islands (BPI) is raising at least P3 billion as it returns anew to the onshore debt market through the issuance of the first ever peso-denominated bonds as a direct response to the coronavirus disease 2019 or COVID-19 pandemic.

The oldest bank in Southeast Asia started offering yesterday the COVID Action Response (CARE) bonds due 2022 with a yield of 3.05 percent until July 17.

“BPI aims to raise at least P3 billion from the bond offering,” the bank said in a disclosure to the Philippine Stock Exchange (PSE).

BPI said the proceeds of the fund raising activity, representing the third tranche of its P100 billion bond and commercial paper program, would finance and refinance eligible micro, small and medium enterprises (MSMEs) under its sustainable funding framework.

BPI said MSMEs have been significantly affected by the global pandemic and the sector, which accounts for a significant percentage of the country’s employment, is crucial to the growth and recovery of the Philippine economy.

“Supporting these businesses will also help create a more inclusive society where all Filipinos benefit from the country’s economic gains,” BPI said.

BPI Capital Corp. and HSBC are the joint lead arrangers for the bond issuance. BPI Capital is the sole selling agent, while HSBC is the participating selling agent.

BPI president and chief executive officer Cezar Consing earlier said the planned CARE bonds highlight the bank’s commitment to achieve positive social outcomes by creating value not only for its business, but also for its stakeholders, including clients and the communities in which it operates.

“MSMEs account for a relatively small percentage of total bank borrowings, but a very large percentage of total nationwide employment. Loans to MSMEs go a long way to keeping Filipinos working. To support MSMEs is to embrace the Bayanihan spirit,” Consing said.

Some of the BPI’s initiatives to support MSMEs include the loan payment deferral program allowing businesses to delay payments without interest charges, waiver of fees for online funds transfer transactions, as well as discussions with state-run Philippine Guarantee Corp. to refine its loan products for qualified clients.

The bank last tapped the onshore debt market in January when it raised P15.3 billion through issuance of two-year peso fixed rate bonds. It also raised P25 billion last December 2018 bringing to P40.3 billion the total amount raised under its P100 billion program.

In the offshore debt market, the Ayala-led bank raised $300 million last year as it became the first Philippine bank to issue dollar-denominated ASEAN green bonds. It also raised 100 million Swiss francs from its maiden ASEAN green bond issuance to bankroll green eligible projects.