The remaining balance of Union Bank of the Philippines’s medium-term note program was reduced to $1.2 billion after the Aboitiz-led bank recently launched a 5-year unsecured note offering.
UnionBank said that the offering has an aggregate principal amount of $300 million.
Each note has a fixed coupon rate of 2.125 percent per annum and is payable semi-annually. Maturity date of the notes is on October 22, 2025.
The offering was oversubscribed by 4.3 times, with orders reaching as much as $1.3 billion. Over 110 investors subscribed to the notes, with the majority or 84 percent of them coming from Asia.
The notes were priced at 195 basis points over the five-year US Treasury yield, UnionBank said.
Proceeds are earmarked to extend term liabilities, expand funding base, and for other general corporate matters.
UnionBank tapped Citigroup Inc., MUFG Securities Asia Limited and Standard Chartered Bank as the joint bookrunners of the transaction.
The offering was drawn out from the bank’s recently upsized $2-billion medium-term note program.
The program was launched with an original size of $1 billion in November 2017. Of this amount, the Aboitiz-led bank in the same year drew out $500 million when it launched its 3.369-percent senior notes offering due in November 2022.
In February, UnionBank raised P6.8 billion from the issuance of Series A unsecured subordinated notes which are eligible as Tier 2 capital. This amount is 36 percent higher than the original issue size of P5 billion. The issuance came from the P20-billion worth of Tier 2 notes program approved by the Bangko Sentral ng Pilipinas in December 2019.
The listed bank saw its net earnings slip by 6 percent to P4.5 billion in the first semester from P4.79 billion in the comparable period last year. This translated to a return on equity of 9.2 percent for the period, which was lower than last year’s 11.1 percent.