BDO to raise ₱5 B from fixed rate bonds

Published January 20, 2020, 12:00 AM

by manilabulletin_admin

By James A. Loyola

BDO Unibank, Inc. (BDO) is raising ₱5 billion from a planned issuance of fixed rate bonds, which is a component of a ₱100-billion bond program approved by its Board of Directors in August 2018.

In a disclosure to the Philippine Stock Exchange, the bank said this follows the ₱35-billion Fixed Rate Bond issuance in February 2019. This is also part of the Bank’s continuing efforts to diversify its funding sources and support its lending activities.

The bonds will have a tenor of 2.5 years and will be priced at 4.408 percent. Interest will be paid quarterly, calculated on a 30/360 count basis. The minimum investment is ₱100,000 with increments of ₱50,000.

The offer period will run from January 20, 2020 up to January 24, 2020, with the issue date targeted for February 3, 2020. However, the Bank reserves the right to adjust the timing of the offer as needed.

The Hong Kong and Shanghai Banking Corporation Limited is the Sole Lead Arranger and Bookrunner for the issue, while BDO Unibank, Inc., BDO Private Bank, Inc. and HSBC are the Selling Agents.

BDO reported a 49.3 percent jump in net income to ₱32.1 billion for the first nine months of 2019 from the 21.5 billion earned in the same period of the previous year.

The bank said earnings growth was largely driven by the expansion in its recurring core revenues.

Customer loans increased by 6 percent year-on-year (YOY) to ₱2.1 trillion, led by the sustained growth in the middle-market and consumer segments.

Meanwhile, total deposits went up by 3 percent YOY to ₱2.4 trillion, with low-cost Current Account/Savings Account (CASA) deposits increasing by 6 percent and accounting for 72 percent of total deposits.

Net interest income (NII) increased YOY to ₱88.5 billion, with net interest margins (NIMs) further improving in the third quarter of 2019.

Non-interest income went up YOY to ₱44.1 billion, led by fee-based income and insurance premiums which accelerated by 14 percent and 23 percent to ₱25.4 billion and ₱10.8 billion, respectively.

Trading and foreign exchange gains in the third quarter of 2019 amounted to ₱690 million from ₱1.0 billion year-ago.

However, the trading and forex gains of ₱4.3 billion for the nine-month period reflects a normalized level compared to 2018, where a more volatile environment prevailed. As such, gross operating income rose to ₱132.6 billion.