Philippine Bank of Communications (PBCom), tycoon Lucio Co’s banking arm, has ended its P2 billion maiden Peso bond offering ahead of schedule, closing more than a week early due to robust investor demand.
Initially set to run from October 14 to October 28, the offering attracted strong interest from both retail clients and a diverse mix of institutional investors, the bank said in a disclosure to the Philippine Stock Exchange.
The Series A bonds which have a tenor of one-and-a-half years and a fixed interest rate of 6.0796 percent per annum, represent the first tranche under PBCom’s P15 Billion Peso Bond Programme.
The Bonds are scheduled to be issued and listed on the Philippine Dealing & Exchange Corporation (PDEx) on November 5, 2024.
Proceeds from the Bond issuance will be utilized for general corporate purposes, including refinancing debt obligations, diversifying funding sources and supporting loan growth.
ING Bank N.V. Manila Branch (ING) served as the Sole Arranger and Bookrunner, with both PBCom and ING acting as selling agents.
As of June 2024, PBCom’s total assets reached P148.7 billion, a 12.2 percent increase compared to the same period in 2023. Loans and Receivables also saw double-digit growth, reaching P90.0 billion compared to same period in 2023.
PBCom’s capital position remains solid, with Capital Adequacy and CET 1 ratios at 16.39 percent and 14.14 percent, respectively; all above the regulatory minimum for a universal bank.
PBCom was assigned an issuer credit rating of PRS Aa minus (corp.), with a Stable Outlook, by Philippine Rating Services Corporation (PhilRatings).
An issuer credit rating, also sometimes called corporate credit ratings or company ratings or counterparty credit ratings, is a measure of a company’s over-all creditworthiness.
An issuer credit rating can be obtained for commercial paper issuances, to rate companies in general, or for any other transaction does not require an issue credit rating.
A company rated PRS Aa (corp.) differs from the highest rated corporates only to a small degree, and has a strong capacity to meet its financial commitments relative to that of other Philippine corporates. The “minus” further qualifies the assigned rating.
A Stable Outlook, on the other hand, indicates that the rating is likely to be maintained or to remain unchanged in the next 12 months.
PhilRatings said PBCom’s assigned rating and Outlook took into account the bank’s enhanced growth potential following the approval of its universal banking license and its experienced management, complemented by synergies within its major shareholder’s ecosystem.
Also taken into consideration is the bank’ sustained earnings growth, but short-term profitability will be subdued; notable improvements in asset quality; and telatively modest share of low-cost current account and savings account (CASA) to total deposits.