SECURITY BANK Corp. has raised $400 million from its offering of five-year dollar-denominated notes as it saw strong demand from investors, it said on Thursday.
The issuance of the Regulation S senior unsecured fixed-rate notes was made following a series of global investor calls held on Monday, Security Bank said in a disclosure to the stock exchange.
“We’re very pleased about the strong demand and successful pricing of our dollar bond issuance. This transaction reflects the market’s continued confidence in Security Bank’s credit strength and growth prospects. The issuance also diversifies our funding sources and enhances our ability to serve our clients across various segments and sectors,” Security Bank Executive Vice-President and Financial Markets Segment Head Arnold Bengco said.
“Proceeds of the notes will be used to extend term liabilities, expand funding base, improve liquidity gaps, to fund investments and other general corporate purposes,” the bank said.
The bonds were priced at 5.5%, 110 basis points (bps) above the benchmark US Treasury yield, amid strong demand, it said.
The notes were initially marketed at 140 bps above the US Treasury yield.
Orders for the notes reached more than $1.5 billion, which Security Bank said was the largest orderbook size it has seen for any of its debt issuances.
“Furthermore, the amount of interest in the notes led to a historic spread of 110 bps for the bank,” it added.
“The offering generated strong interest from a diverse pool of investor accounts, consisting of global fund and asset managers, banks, insurance companies, private banks, and other institutions,” Security Bank said.
The bonds were issued out of the bank’s $1-billion medium-term note program established on Aug. 29, 2018.
The transaction is expected to settle on May 14. The notes will be listed on the Singapore Exchange.
Security Bank mandated Mitsubishi UFJ Financial Group and UBS as joint global coordinators for the issue and Standard Chartered Bank and SB Capital Investment Corp. as joint bookrunners.
It expects the bonds to be rated “Baa2” by Moody’s Ratings, which is in line with the debt watcher’s latest assessment of the listed lender, as well as its investment-grade rating on the Philippines.
Security Bank’s net income declined by 13.74% year on year to P9.105 billion in 2023 due to higher expenses and as it set aside more loan loss reserves.
Its shares closed at P69.90 each on Thursday, declining by P1 or 1.41% from the prior session. — A.M.C. Sy
