THE Bank of the Philippine Islands (BPI) is tapping the international capital market to raise $400 million for its refinancing and general corporate needs.
In a statement last Wednesday, the BPI said this is its first public USD bond issuance for the first time since 2019. The 5-year “Regulation S” senior unsecured notes were issued under BPI’s $3-billion “Medium Term Notes Program.”
The 5-year Notes were priced at US Treasury spread of T+105 basis points (bps) with a coupon of 5.25 percent, representing the tightest ever spread on a 5-year bond from a non-sovereign Philippine issuer.
According to the BPI, the Notes are rated “Baa2” by Moody’s and that the transaction is expected to settle on March 26. The lender announced the transaction mandate on March 18 and conducted a comprehensive investor marketing exercise involving a global investor call and a series of meetings covering investors across Hong Kong, Singapore, and London.
After receiving positive investor feedback, the BPI launched the transaction bookbuilding on March 19 with an Initial Pricing Guidance (IPG) of T+140 bps area.
The lender said orderbooks saw a strong momentum throughout the day, despite a week rife with global central bank policy meetings, with the final books standing at over $1.3 billion, as the Notes were 3.3 times oversubscribed.
“This allowed 35 bps of pricing compression from IPG to final pricing, even as the issue size was increased from the original indications of $300 million, to accommodate the strong oversubscription levels,” BPI said.
In terms of geographic allocation, the Notes were distributed 81 percent to Asia and 19 percent to EMEA (Europe, Middle East, and Africa) and/or offshore US accounts.
The Notes were distributed to high quality fixed income accounts: 51 percent to fund managers; 29 percent to banks; 17 percent to private banks and financial institutions; and, three percent to insurance.
BPI Capital was the Sole Global Coordinator, while J.P. Morgan, Mizuho, Standard Chartered Bank and UBS were the Joint Lead Managers for the transaction.