Demand prompts BPI to shorten period for Covid debt-paper offer

The Bank of the Philippine Islands (BPI) announced it shortened the offer period for its Covid bonds on the back of robust demand.

The Ayala-led bank said in a disclosure on Thursday that the offer period was concluded on July 8, more than a week earlier than planned.

The subscriptions for the Philippines’s maiden Covid response bonds surpassed the initially planned P3-billion issue size. However, BPI did not disclose the exact amount or the reason for not doing so.

Each bond has a tenor of 1.75 years and carries an interest rate of 3.05 percent per annum.

Proceeds from the transaction will be allocated to finance and refinance eligible micro, small and medium enterprises (MSMEs) under BPI’s sustainable funding framework.

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

“The bank values the significant contribution of MSMEs to the economy and aspires to help these enterprises bounce back from the paralysis caused by the pandemic,” BPI said.

MSMEs comprise 63 percent of the total employment and 99.5 percent of total enterprises in the Philippines.

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 tapped BPI Capital Corp. and The Hongkong and Shanghai Banking Corp. Ltd. (HSBC) as the joint lead arrangers of the transaction.

BPI Capital was the sole selling agent while HSBC served as participating selling agent.

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

BPI shares fell 3.09 percent, or P2.30, to close at P72.20 each amid the 1.48-percent plunge for the benchmark index on Thursday.


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