Zobel-controlled Bank of the Philippine Islands (BPI) has raised $400 million by successfully tapping the international capital markets with a public US-dollar bond issuance for the first time since 2019.

In a disclosure to the Philippine Stock Exchange (PSE), the bank said its offering of five-year Reg S senior unsecured notes were issued under BPI’s $3 billion Medium Term Notes Programme.

BPI said the notes are rated Baa2 by Moody’s Investors Service and the net proceeds will be used for refinancing and general corporate purposes. The transaction is expected to settle on March 26, 2024.

The five-year notes were priced at US Treasury spread of T+105 basis points (bps) with a coupon of 5.25 percent, representing the tightest ever spread on a five-year bond from a non-sovereign Philippine issuer, adding another milestone to BPI’s long list of achievements.

BPI had announced the transaction mandate on March 18, 2024 and conducted a comprehensive investor marketing exercise involving a global investor call and a series of meetings covering investors across Hong Kong, Singapore, and London. 

After receiving positive investor feedback, BPI said it proceeded to launch the transaction bookbuilding on March 19, 2024, with an Initial Pricing Guidance (“IPG”) of T+140 bps area. 

“Orderbooks saw strong momentum throughout the day, despite a week rife with global central bank policy meetings, with the final books standing at over $1.3 billion, as the Notes were 3.3 times oversubscribed,” the bank said. 

It noted that “this allowed 35 bps of pricing compression from IPG to final pricing, even as the issue size was increased from the original indications of $300 million, to accommodate the strong oversubscription levels.”

In terms of geographic allocation, the notes were distributed 81 percent to Asia and 19 percent to EMEA and offshore US accounts. 

The notes were distributed to high quality fixed income accounts: 51 percent to fund managers; 29 percent to banks; 17 percent to private banks and financial institutions; and three percent to insurance.

BPI Capital was the Sole Global Coordinator, while J.P. Morgan, Mizuho, Standard Chartered Bank and UBS were the Joint Lead Managers for the transaction.