BDO raises ₱40 B from upsized fixed rate bond sale

Published January 29, 2020, 12:00 AM

by manilabulletin_admin

By James A. Loyola

BDO Unibank, Inc (BDO) has raised ₱40.1 billion from its fixed rate bond issue, eight times the original offer of ₱5.0 billion, on robust demand from retail and institutional investors.

The one-week offer period ended last January 24, 2020, with issue date set on February 3, 2020.

The bonds will have a tenor of 2.5 years with a yield of 4.408 per cent per annum. Interest will be paid quarterly, calculated on a 30/360 count basis.
The bond issuance is part of BDO’s continuing efforts to diversify its funding sources and support its lending activities, and follows the ₱35 billion of fixed rate bonds issued in February last year.

The Hong Kong and Shanghai Banking Corporation Limited (“HSBC”) was the Sole Lead Arranger for the issue, while BDO Unibank, Inc., BDO Private Bank, Inc., and HSBC were the Selling Agents.

The latest issuance is a component of a ₱100 billion bond program approved by its Board of Directors in August 2018.

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 P2.1 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 P88.5 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.