UNIONBANK OF THE Philippines, Inc. raised P9 billion from its sale of two tenors of bonds, which will be used to ramp up the bank’s funding capacity and expand business operations.
The Aboitiz-led bank sold P8.115 billion via three-year notes and P885 million in 5.25-year bonds for a total of P9 billion in fresh funding, thrice its initial plan to raise at least P3 billion, it said in a disclosure to the local stock exchange on Thursday.
The three-year notes fetched an interest rate of 2.75% while the 5.25-year bonds were quoted at a 3.375% rate.
The debt papers will be issued and listed on the Philippine Dealing & Exchange Corp. on Wednesday, Dec. 9.
This issue is the third out of the bank’s P39-billion bond program launched last year.
UnionBank said the dual-tranche bond offer saw strong demand from investors.
“The third drawdown from the bank’s program is part of our ongoing efforts to extend term liabilities, expand funding base, and also support its business expansion plans,” Jose Emmanuel U. Hilado, UnionBank senior executive vice-president chief financial officer and treasurer, was quoted as saying.
The Hongkong and Shanghai Banking Corp. Ltd. (HSBC) and Standard Chartered Bank (SCB) acted as the joint lead arrangers and bookrunners for the transaction. They were also selling agents along with UnionBank.
The latest issuance was the bank’s first dual-tranche offering issued under Bangko Sentral ng Pilipinas (BSP) Circular No. 1010, while its 5.25-year bonds is the longest tenor the lender has issued so far.
The BSP circular issued in 2018 simplified the process for universal and commercial banks looking to raise funds via bonds. The measure aims to help deepen the country’s capital markets.
UnionBank’s net profit climbed 11% from a year ago to P4.2 billion in the third quarter on higher recurring income.
This brought its nine-month net income to P8.5 billion, down 0.9% year on year due to higher loan loss reserves amounting to P7.5 billion in the period amid impact of the coronavirus pandemic on the economy.
UnionBank shares closed P65.50 apiece on Thursday, up 0.31% or by 20 centavos from its P65.30 finish the day before. — Beatrice M. Laforga