Union Bank of the Philippines raked in P9 billion from its dual-tranche peso-denominated bond offering, which was oversubscribed by three times on the back of robust demand.
The 3-year bonds carrying an interest rate of 2.75 percent raised a total of P8.115 billion while the 5.25-year tranche with 3.375-percent coupon rate registered P885 million.
Shares in UnionBank climbed by 20 centavos, or 0.31 percent, to close at P65.50 each amid the 1.60-percent rise for the benchmark index on Thursday.
The bond offering, which has an original issue size of P3 billion, is set to be issued and listed on the Philippine Dealing and Exchange Corp. on December 9.
The issuance is the third transaction from UnionBank’s P39-billion bonds program.
“The third drawdown from the Bank’s program is part of our on-going efforts to extend term liabilities, expand funding base, and also support its business expansion plans,” UnionBank Chief Financial Officer Jose Emmanuel U. Hilado said.
The bond offering is also the bank’s first dual-tranche offering issued under the Bangko Sentral ng Pilipinas (BSP) Circular 1010 on bank-issued bonds. In addition, the 5.25-year tranche is UnionBank’s issuance with the longest tenor to date.
Hong Kong and Shanghai Banking Corp. and Standard Chartered Bank are the joint lead arrangers and bookrunners of the transaction. Along with UnionBank, both banks are also the selling agents.
In October, UnionBank issued 5-year senior unsecured fixed rate notes amounting to $300 million. The offering has a fixed coupon rate of 2.125 percent per annum. Proceeds are allocated to extend term liabilities, expand funding base, and for other general corporate matters.
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.
Citigroup Inc., MUFG Securities Asia Limited and Standard Chartered Bank were the joint bookrunners of the transaction.
The Aboitz-led bank also raised P6.8 billion in February from the issuance of series A unsecured subordinated notes which are eligible as Tier 2 capital. It came from the bank’s P20-billion of Tier 2 notes program approved by the BSP in December 2019.
Recently, UnionBank announced that it was the first Philippine bank to join the international organization Banking Industry Architecture Network (BIAN), which was established in 2008 to provide best banking architecture and to set banking technology standards in the industry. It is composed of banks, financial technology, technology providers, consultants and academics.
The bank said it can “help to define banking technology standards, creating industry-wide best practices and play an active role in shaping the future of banking” by being part of the global network.
UnionBank saw its net earnings drop by 0.9 percent to P8.5 billion in the first nine months due to higher provisions for loan losses. Revenues, meanwhile, grew by 33 percent to P31.8 billion for the period, thanks to 36-percent increase in net interest income.