Philippine National Bank (PNB) has successfully returned to the international debt markets and raised $300 million through a benchmark-sized Sustainability Regulation S offering of 5-year senior notes under its $2 billion Euro Medium Term Note programme.

In a disclosure to the Philippine Stock Exchange, the bank said it conducted a two-day roadshow starting on October 14, 2024 to engage with potential investors.

The 5-year bond was priced at T+102 basis points, with a fixed coupon rate of 4.85 percent. Moody’s has assigned an investment grade rating of Baa3 to the 5-year bond.

The offering was met with strong demand, as the final order book was more than 3.6 times oversubscribed, reaching $1.1 billion from global investors. 

In terms of geographical distribution, 89 percent of the investors were from the Asia Pacific (APAC) region, while 11 percent were from Europe, the Middle East, and Africa (EMEA). 

By investor type, 67 percent were asset managers and hedge funds, 23 percent were banks, and the remaining 10 percent were private banks, broker dealers and others.

“We believe this is an ideal time to return to the market, given the reduction in interest rates complemented by the Bank’s improved core banking activities,” said PNB Chief Financial Officer Francis Albalate. 

He added that, “We have already enhanced our banking operations and processes to support continuous growth as we expect our business to further strengthen in the future.”

“We are grateful for the support shown by global investors in our return to the international bond market after a 5-year hiatus,” said PNB President Florido Casuela. 

He noted that, “The result of this note offering is a clear indication of investors’ trust and confidence in PNB. 

“This offering will fund the Bank’s sustainable financing initiatives as we continue to solidify our position among the forerunners of nationwide development across the Philippine banking system.”

ING and J.P. Morgan were the Joint Lead Managers and Joint Bookrunners for the transaction, and PNB Capital acted as Sole Global Coordinator in relation to the Programme. ING acted as the Sole Sustainability Coordinator.

PNB posted a net income of P10.3 billion in the first half of 2024, 5.6 percent higher year-on-year. This translated to a return on average equity (ROE) of 10.5 percent, higher than 10.3 percent and 10.0 percent in the first half of 2023 and full-year 2023, respectively. 

Its Common Equity Tier 1 (CET1) ratio of 18.5 percent remains the highest among Philippine local banks.