The Ayala Group’s financial arm Bank of the Philippine Islands (BPI) is seeking to raise funds overseas through the issuance of an undetermined amount of US dollar-denominated fixed-income securities.

In a disclosure to the Philippine Stock Exchange (PSE), the bank said it has mandated BPI Capital Corporation as Sole Global Coordinator and Lead Arranger, alongside J.P. Morgan Securities plc, Mizuho Securities Asia Limited, Standard Chartered Bank, and UBS AG Singapore Branch as Joint Lead Arrangers to arrange a series of fixed income investor meetings commencing on March 18, 2024. 

“A Regulation S offering of U.S. dollar-denominated senior unsecured debt securities may follow, subject to market conditions. The Notes are expected to be rated Baa2 by Moody’s, and when issued, will constitute a drawdown under BPI’s medium term note programme,” BPI said. 

The legal adviser of BPI as to Philippine law is SyCip Salazar Hernandez & Gatmaitan, and the legal adviser of the Joint Lead Arrangers is Romulo Mabanta Buenaventura Sayoc & de los Angeles. 

As to English law, the legal adviser of the Joint Lead Arrangers is Milbank (Hong Kong) LLP while Milbank LLP is the legal adviser of the Hongkong and Shanghai Banking Corporation Limited, the Trustee.

BPI Chief Finance Officer Eric M. Luchangco said in an interview last month that the bank is looking to raise $300 million this year to refinance bonds maturing in September of the same amount.

“We're looking at various options, but we will refinance that bond. I think it's just a matter of at the time that we're ready to refinance it, what is the method that we're going to use,” he said.

Luchangco added that while the bond is maturing in September it does not have to be refinanced exactly on the day or that the money does not have to be raised on the same day that the bank is repaying the bondholders.

“We have some flexibility in terms of refinancing… we can refinance ahead. But the downside of refinancing ahead is that you're carrying two costs at the same time… But, we also have to look at what the market is like, if it looks like it's a very good opportunity to refinance now (if rates are low), maybe it's worth it to have that negative carry,” Luchangco explained.

He noted that they have already decided to refinance the bond but continue to look at options on how to refinance it.

“I think, at this point, time is on our side, because the maturity isn't until September. And, so, between now and September, we're just continuing to watch the situation, see what our opportunities are. You can return to the bond market or get a loan, we could do another syndicated loan. We just did one last year,” Luchangco said.

He added that they are considering both domestic and offshore debt markets for the fund-raising activity.

BPI reported a record high net income for 2023, driven by record revenues and lower provisions which offset the increase in operating expenses.

The bank said its net income rose 30.5 percent to an all time high of P51.7 billion last year from P39.6 billion in 2022.

Excluding the impact of the one-off gain from the 2022 property sale, net income would be up 44.1 percent.