Bank of Commerce raises P6.57 billion from bond offering

MANILA, Philippines — San Miguel-led Bank of Commerce has raised P6.57 billion in its second foray into the domestic debt market, as institutional and retail investors swarmed its peso bond offering.

The fund raising activity was oversubscribed as it exceeded the original size of P5 billion.

“The offer was 1.3 times oversubscribed, evidencing strong demand from institutional and retail investors,” Bank of Commerce said.

The bonds, with a tenor of 1.5 years and a fixed rate of 6.5635 percent per annum, will be listed on the Philippine Dealing and Exchange Corp. on May 16.

According to the Bank of Commerce, the proceeds of the fund raising activity would be used to refinance maturing debt obligations.

ING Bank Manila Branch and Philippine Commercial Capital Inc. served as joint lead arrangers, joint bookrunners and selling agents, while Bank of Commerce also acted as a selling agent.

The Series B bonds were exempted from registration and have not been registered with the Securities and Exchange Commission.

The fund raising activity marked the second part of the bank’s P20-billion bond program.

The bank raised P7.5 billion in its first bond issuance under the program earlier in July 2022, more than double the original size of P3 billion.

The proceeds of the fund raising activity were used to manage the bank’s net interest margin by matching long-term assets with long-term funding to reduce interest rate risk, to diversify funding sources and for general corporate purposes.

The bank’s net income surged by 55.7 percent year on year to P2.8 billion in 2023 from P1.8 billion a year ago amid strong growth in its core lending business.

At the end of 2023, the lender’s return on equity stood at 9.52 percent, an improvement from the previous year’s 7.01 percent and more than double its initial public offering prospectus return on equity of 4.22 percent.

Bank of Commerce has a network of 140 branches and 250 ATMs as of end-March.