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BPI aims to raise P3 billion from Covid-19 bonds


The Bank of the Philippine Islands (BPI) said it eyes to raise at least P3 billion from its Covid Action Response (Care) bond offering, which is aimed at funding micro, small and medium enterprises (MSMEs).

In a disclosure on Monday, the Zobel de Ayala-led bank announced that each Care bond carries a tenor of 1.75 years and an interest rate of 3.05 percent per annum.

The offer period is from June 22 to July 17, 2020.

The issue and listing date of the bonds are set on August 7. BPI and the offering’s joint lead arrangers may change the schedule if needed, the bank said.

The bank tapped BPI Capital Corp. and The Hongkong and Shanghai Banking Corp. Ltd. (HSBC) as the joint lead arrangers of the transaction. BPI Capital is the sole selling agent while HSBC is serving as participating selling agent.

The said offering is the first of its kind in the country. The bonds will be issued as the third tranche of BPI’s P100-billion bond program.

Proceeds from the transaction will be allocated to finance and refinance eligible MSMEs under BPI’s Sustainable Funding Framework, which it launched earlier this month.

The said framework covers the issuance of green, social or sustainable bonds or loans. It is part of its Green Finance Framework—which was launched in June last year to fund environmental initiatives—and underscores the inclusion of projects that address social issues.

“MSMEs have been significantly affected by the global pandemic and BPI recognizes that these enterprises, which account for a significant percentage of the country’s employment, are crucial to the growth and recovery of our economy,” the listed bank said. MSMEs comprise 63 percent of the total employment and 99.5 percent of total enterprises in the Philippines.

In the first quarter, BPI saw its net earnings decline by 5 percent to P6.39 billion on the back of higher allowance for bad debts. The bank hiked its buffer for potential loan losses to P4.32 billion in the first three months, which is more than double the amount it booked for the comparable period.

Revenues in the first three months, however, climbed by 10.9 percent to P25.26 billion while net interest income surged 13 percent to P18.14 billion. Net interest margin stood at 3.63 percent—higher by 24 basis points from 3.39 percent year-on-year—as of end-March.

BPI shares climbed by 0.55 percent, or 40 centavos, to end at P73 each amid the 0.51-percent hike for the benchmark index on Monday.

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