THE Philippine National Bank (PNB) closed its lower Tier 2 notes offer with P9 billion in total orders, or three times the original P3 billion it offered.

In a disclosure to the Philippine Stock Exchange yesterday, the bank, led by business tycoon Lucio Tan, completed the issuance of P6 billion worth of Lower Tier 2 (LT2) notes on June 19. The notes were issued at par with a coupon rate of 8.50 percent per year.

“We are extremely pleased with the outcome of the transaction as it provides us with a new source of capital ahead of our planned merger with Allied Banking Corp.,” PNB president and chief executive officer Omar Byron Mier said in the statement.

“Strong demand” prompted the bank to increase the issue size to P6 billion, the maximum approved by the central bank on May 8, said the bank. 

“We are happy to complete such a successful transaction given the current volatile market conditions. This speaks highly of the strong confidence in the bank both of retail and institutional investors which bought the issue,” Mier said.

The transaction was the third peso-denominated LT2 offering from the bank in four years. The notes will be used to refinance its existing LT2 notes callable in February 2009.

The issuance is expected to boost the bank’s capital-adequacy ratio from 18.51 percent to 22 percent. 

Deutsche Bank AG Manila was hired as the arranger and selling agent for the issuance, as well as the transaction registry. Other selling agents included Allied Banking Corp., First Metro Investment Corp. and Multinational Investment Bancorporation. The limited selling agents were PNB and PNB Capital and Investment Corp., while Development Bank of the Philippines was the public trustee.

In 2007, the bank posted a net income of P1.5 billion, up 83 percent from 2006. As of end-December 2007, the bank had total capital funds of P30.2 billion and a capital-adequacy ratio of 19 percent compared with the Bangko Sentral policy of 10 percent.

For the first quarter of the year, it posted a net income of P457 million, up 48 percent from P308 million a year earlier. Its core businesses and reduced nonperforming assets helped boost the bank’s profitability.

Total deposits for the first three months reached P180 billion. It also said its operating expenses dropped 23 percent.

Consolidated assets for the first quarter grew to P242 billion, up by P2.7 billion from the end of 2007. Consumer lending also grew to P3.3 billion, up by 25 percent from the end of 2007. Its net loans and receivables reached P77 billion.

PNB’s capital-adequacy ratio was pegged at 18.51 percent by the end March. 

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PNB completes Tier 2 notes issuance; offer is oversubscribed

THE Philippine National Bank (PNB) closed its lower Tier 2 notes offer with P9 billion in total orders, or three times the original P3 billion it offered.

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