San Miguel Corporation affiliate Bank of Commerce (BankCom) is raising at least P5 billion from the public offer of its dual-tranche fixed rate bonds due 2027 (Series C Bonds) and fixed rate bonds due 2030 (Series D Bonds).
In a disclosure to the Philippine Stock Exchange (PSE), the bank said it has started offering the bonds which will have an oversubscription option and will be issued as the third tranche of BankCom’s increased P50 billion Peso Bond Programme.
The Series C Bonds have a tenor of two years and a fixed interest rate of 6.1942 percent per annum. The Series D Bonds have a tenor of five and a quarter (5.25) years and a fixed interest rate of 6.3494 percent per annum.
Interest shall be paid quarterly. Eligible individual investors that hold the Series D Bonds until maturity will enjoy a net fixed interest rate of 6.3494 percent per annum.
The minimum investment amount is P100,000 with increments of P50,000 thereafter. The public offer period runs from Jan. 28 to Jan. 30, 2025 12:00 noon.
The Series C Bonds and Series D Bonds are targeted to be issued and listed on the Philippine Dealing & Exchange Corp. (PDEx) on Feb. 19, 2025.
Proceeds from the issuance will be used for management of the bank’s balance sheet, diversification of funding sources, and general corporate purposes.
As of September 2024, BankCom recorded a net income of P2.2 billion, a 10 percent increase from the P2 billion reported in the previous year. Return on Equity stood at 9.27 percent, more than double the bank's IPO prospectus ROE of 4.22 percent.
The bank’s healthy profit was backed by growth in its core lending business. Net interest income was up by 11 percent year on year with growth registered across all lending segments.
The bank also saw growth on its service charges, fees, and commissions driven by revenues from its investment banking, credit card, and trust businesses.
BankCom appointed ING Bank N.V., Manila Branch (ING), Philippine Commercial Capital, Inc. (PCCI Capital), Security Bank Capital Investment Corporation (Security Bank Capital), and Standard Chartered Bank (SCB) as Joint Lead Arrangers and Joint Bookrunners for this issuance.
BankCom is also acting as a Selling Agent for the offering, together with ING, PCCI Capital, Security Bank Capital, and SCB.
The banks listed P6.57 billion worth of its 1.5-year Series B Bonds on the Philippine Dealing & Exchange Corporation (PDEx) in May last year.
It said the aggregate orderbook for the issuance exceeded the original target issue size by 1.3 times, evidencing strong demand from institutional and retail investors.
BankCom’s bond was offered on April 30, 2024 at a coupon rate of 6.5635 percent per annum due 2025. The bonds were listed on May 16, 2024 in PDEx.
The Series B Bonds represent the second tranche of BankCom’s P20 billion Bonds Programme. Proceeds from this issuance were used to refinance maturing debt obligations.