BANK of the Philippine Islands (BPI) has raised P40 billion from its latest offering of sustainable bonds, it said on Tuesday.
The final issue size for the landmark BPI Supporting Inclusion, Nature, and Growth (SINAG) Bonds was well above the initial P5-billion plan, making it the bank’s largest peso bond issuance to date, the listed lender said in a disclosure to the stock exchange.
This also marked the first tranche of the bank’s P200-billion bond and commercial paper program approved by its board of directors in October last year.
The bonds, which the Securities and Exchange Commission on March 17 confirmed to be qualified as ASEAN Sustainability Bonds, were listed on the Philippine Dealing & Exchange Corp. on Tuesday.
The papers have a tenor of 1.5 years and carry an interest rate of 5.85% per annum to be paid quarterly.
The bond offer period ran from May 20-26, closing ahead of the original May 30 end date amid strong demand. BPI Capital Corp. and Standard Chartered Bank were the joint lead arrangers and selling agents for the transaction.
Proceeds will exclusively finance or refinance eligible green and social projects in accordance with BPI’s Sustainable Funding Framework, the bank said, adding that the issuance is in line with its environmental, social, and governance strategy to integrate sustainability across its business lines.
“The enthusiastic response to the BPI SINAG Bonds reflects a growing alignment between capital markets and sustainability. We are honored by the trust placed in us and excited to channel these funds into projects that directly benefit communities and the environment… We remain committed to developing innovative instruments that support the country’s sustainable development goals while delivering solid value to our investors,” BPI Treasurer and Global Markets head Dino R. Gasmen said in his speech at the bond listing ceremony.
Mr. Gasmen told reporters on the sidelines of the event that client demand for the bond offer was “really huge.”
“We could have issued at least P20 billion more, but we also had to weigh it against what we can promise to you because we don’t want to borrow for sustainability purposes then we can’t deploy [the funds],” he said.
Asked if BPI will conduct more bond offerings this year, Mr. Gasmen said it would depend on market conditions, with the bank’s latest issuances enough to refinance their maturing debt, including syndicated loans.
“Dollars, we’re very confident that we have enough. We had an issuance early this year. I don’t think any bank has returned [to the offshore debt markets] apart from us,” he said.
In March, the bank raised a record $800 million from its offering of dual-tenor dollar-denominated bonds, which marked its return to the international capital markets after a year. Broken down, it issued $500 million in five-year and $300 million in 10-year Reg S senior unsecured fixed-rate notes.
The five-year tenor fetched a coupon of 5%, while the 10-year tranche was priced at 5.625%.
Mr. Gasmen added that they could refinance the P33.7-billion Sustainable, Environmental, and Equitable Development or SEED bonds, which were issued in August last year and are set to mature in February 2026.
BPI may consider issuing bonds with longer tenors to cater to investors looking for higher yields, he said.
“Let’s look at what the opportunities in the market are because one of the reasons why we’re keeping it (bond tenors) short is, first of all, there’s a lot of uncertainty in the market,” he said. “The other factor which will determine the tenor is the current monetary policy cycle of the BSP (Bangko Sentral ng Pilipinas) because right now, they’re (interest rates) going down.”
BPI Chief Sustainability Officer and Chief Financial Officer Eric M. Luchangco told reporters at the same event that the bank is working on a blue bond framework that they expect to complete within the year.
The bank’s net income increased by 9% year on year to P16.6 billion in the first quarter.
BPI’s shares went down by P1.70 or 1.22% to close at P137.90 apiece on Tuesday. — A.R.A. Inosante
