The Development Bank of the Philippines (DBP) raised P3.875 billion in fresh funds for key priority sector projects through its latest local bond issuance, said its president and CEO Michael O. de Jesus on Thursday, Aug. 3.
The state-owned bank’s 1.5-year Fixed Rate Series 4 bond issuance reached more than 3.6 times the announced minimum issue size of P2 billion for the Series 4 bonds, which culminates its four-year P55 billion Sustainable Bond Program.
“Notwithstanding the volatile market backdrop, we are buoyed by the strong support from institutional investors, which allowed us to price at our tightest ever spread of 10 basis points over the relevant benchmark,” de Jesus noted.
“The overwhelming reception of DBP’s issuance resulted in closing the offering period earlier than expected,” he said.
Earlier, DBP issued two bond offerings – an offshore bond that raised $300 million in 2021 which was rated “BBB” by Fitch Ratings, and an onshore bond offering in 2022 that fetched P12-billion via private placement.
The latest bonds were offered at par value with an interest rate of 6.4126 percent per annum with a 1.5-year tenor, which is set to mature in January 2025, and were enrolled and traded through the Philippine Dealing & Exchange Corporation.
Part of the proceeds would also be used to augment DBP's future loan growth pipeline, balance sheet expansion, and provide diversification of funding sources amidst rising demand from clients, De Jesus explained.
The Series 4 bonds were distributed via private placement.
Participation was limited to Qualified Institutional Buyers, similar to what the bank adopted in 2022.
DBP tapped Standard Chartered Bank as Issue Manager together with China Bank Capital, as Joint Lead Arrangers and Bookrunners.
“Our latest bond issue offered investors an opportunity to stimulate the economy and contribute to the country’s recovery,” de Jesus concluded.