Security Bank raises funds via fixed-rate bond offering


Several banks have been tapping the debt market amid the Covid-19 pandemic, including Security Bank Corp. which announced on Tuesday it had begun offering fixed P5-billion worth of fixed-rate bonds.

In a disclosure to the local bourse, Security Bank said that the offering might still be upsized depending on the demand for the bonds.

Offer period will last until July 15. Security Bank intends to list the bonds on the Philippine Dealing and Exchange Corp. on July 24.

Each bond carries a tenor of two years and a fixed rate of 3.125-percent per annum. Minimum denominations were set for P1,000,000 and increments of P100,000 thereafter.

The listed bank did not disclose the allocation of proceeds.

Security Bank tapped Philippine Commercial Capital Inc. and SB Capital Investment Corp. as joint lead arrangers and selling agents for the issuance.

The transaction will be issued from the bank’s P100-billion bond and commercial paper program. It was initially established with an aggregate amount of P50 billion in December 2018 before the bank’s board of directors approved to increase it.

In December last year, the listed bank raised P2.31 billion from the issuance of long-term negotiable certificates of deposits. It was in line with Security Bank’s initiative to diversify sources of funding and finance expansion plans.

Security Bank saw its net earnings grow by 21 percent to P2.9 billion in the first quarter despite increasing provisions for credit losses amid the pandemic.

The bank set its allowance for bad loans at P5.7 billion in the first three months of the year, which already surpassed the 2019 full-year provision of P4.2 billion.

As of end-March, Security Bank’s common equity tier 1 ratio and capital adequacy ratio stood at 16.5 percent and 17.6 percent, respectively. Total assets inched up 3 percent to P783 billion while shareholders’ capital rose 7 percent to P119 billion in the first three months.

Security Bank shares climbed by 3.75 percent, or P3.90, to finish at P108 each amid the 0.78-percent dip for the benchmark index on Tuesday.

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