MANILA, Philippines — Land Bank of the Philippines yesterday announced that it has raised P10.5 billion from selling 10-year peso-denominated Tier 2 notes, exceeding the target of P6.5 billion.

In a statement, Landbank said the offering was oversubscribed it received P12.5 billion in orders. According to bank president and CEO Gilda E. Pico, “we are very pleased with the results of our capital raising exercise. (This will) further strengthen Landbank’s capital ratios and provide us significant room to continue pursuing our mandate of supporting countryside development.”

Pico noted that because of the strong demand, they were able to price the notes at the “tightest end” of its indicative pricing guidance at 5.875 percent per annum, lower than previously announced of about six percent. The rate is one of the lowest coupons for this class.

The last time the government financial institution, the largest in the country in asset size, raised Tier 2 capital was in 2009 when it offered P3 billion for capital and loan financing.

The Bangko Sentral ng Pilipinas has approved Landbank’s proposal to issue up to P12 billion Tier 2 capital. After issuing the notes today amounting to P10.5 billion, it still has authority to issue up to P1.5 billion.

The issuance was arranged by Deutsche Bank AG, The Hongkong and Shanghai Banking Corp. and Standard Chartered Bank. Multinational Investment Bancorporation also acted as selling agent.

For the third quarter 2011, Landbank reported income of P7.2 billion, up 12 percent year-on-year. The bank’s deposit base grew by 15 percent to P460 billion with loans from the private sector and government deposits increasing as the bank improved its customer service.

As of September 30, the bank also reported that its assets expanded by 12 percent to P591 billion. The bank’s capital base, in the meantime, increased to P66 billion while capital adequacy ratio further strengthened to 18.4 percent.