BPI Bond and LTNCD Issues
Peso Bond Program
On November 13, 2018, the Bank priced its offering of ?25 billion, 1.25 year fixed rate bonds due March 2020. The fixed rate bonds will pay a coupon of 6.7970% per annum, payable quarterly. The coupon represents a spread of 20 bps over the interpolated 1.25 year BVAL government benchmark rate, and is at the tight end of the spread range of 20 to 40 bps communicated to institutional investors during the institutional book-building period.
The offering supports the Bank’s growth objectives and expansion plans while diversifying its funding sources. At the same time, the fixed rate bonds address clients' need for new investments with shorter tenors compared to long-term negotiable certificates of deposits.
Due to the strong response from both retail and institutional investors, we closed the offer period one day ahead of schedule as the issue was oversubscribed by 52%.
US Dollar Bond Program
On August 28, 2018, BPI, rated Baa2/BBB- (Moody’s/Fitch), priced its maiden US$ 600-million five-year Senior Unsecured Fixed Rate Reg S Notes under its US$2 billion Medium Term Note Programme. This issuance marked a first in our 167-year history and the largest ever debut issuance for a Philippine financial institution. We aimed to raise US$ 300 million to US$ 500 million from the transaction but, given strong investor reception, increased the size of the offering to US$ 600 million. The deal was three times oversubscribed. The Notes were priced with a coupon of 4.25% and a yield of 4.345%, offering a single digit to no new issue premium, which is not typical for new issuers.
Long-Term Negotiable Certificates of Time Deposit (LTNCTDs)
On October 27, 2017, BPI launches its LTNCTDs worth Php5 billion with option to upsize, to support the Bank’s expansion plans and to diversify funding sources while offering investors an attractive investment instrument. The LTNCTDs have a tenor of five and a half (5½) years and an indicative interest rate of 3.625% to 3.750% p.a. The final interest rate will be set prior to the end of the offer period. Interest on the LTNCTDs will be paid quarterly. The minimum investment amount is set at Php100,000.00 and in increments of Php50,000.00. ING Bank N.V., Manila Branch was tapped as the sole arranger of this deal and also acts as Selling Agent together with BPI Capital Corporation and BPI.
Stock Rights Offer (SRO)
In May 2018, BPI raised Php 50 billion from its stock rights offering (SRO), the largest equity capital markets transaction in our 167-year history. The SRO involved the issuance of 558,659,210 new common shares (a ratio of 1:7.0594 common shares held or 14.2% of BPI shares outstanding) to shareholders as of record date. The SRO received strong support from both domestic and foreign shareholders, and was oversubscribed by 22.3%. The SRO cemented our position as one of the best capitalized banks in the Philippines, increasing our Common Equity Tier 1 (CET1) ratio from 11.84% to 15.19%.