Security Bank starts offer of 1.5-year bonds
SECURITY BANK Corp. (Security Bank) on Monday started an offer of 1.5-year peso-denominated bonds from which it is looking to raise at least P3 billion in fresh funds.
The bonds are being marketed with a fixed rate of 5.3% per annum, Security Bank said in a disclosure to the stock exchange on Monday.
“Proceeds will be used to support the bank’s lending activities and expand its funding base,” the lender said in an e-mail.
The issue size is set at P3 billion with an oversubscription option depending on demand. The bonds will be issued out of Security Bank’s P100-billion peso bond and commercial paper program.
The papers are available to the market for investments starting at P1 million and increments of P100,000 thereafter.
The offer period will run until Oct. 28, unless adjusted by the bank.
Security Bank will list the bonds on the Philippine Dealing and Exchange Corp. on Nov. 10 “to provide secondary market liquidity to investors who would like to trade the instruments,” it said.
The lender tapped Philippine Commercial Capital, Inc. (PCCI) to be the sole bookrunner for the issuance. The joint lead arrangers and selling agents for the transaction are PCCI and SB Capital Investment Corp.
The offering is the Security Bank’s second for the year. The listed bank last tapped the domestic debt market in July, where it raised P16 billion via 1.5-year peso bonds, more than the original plan of P1 billion as the offer was oversubscribed.
The papers were also issued also out of the lender’s P100-billion peso bond and commercial paper program.
Security Bank Executive Vice-President and Financial Markets Segment Head Raul Martin A. Pedro had said that successful issuance and the oversubscription are testaments to investor confidence in the lender.
The lender doubled its bond and commercial paper program to P100 billion in June 2020 from the initial P50 billion when it was established in December 2018 as it wanted to raise more funds for its lending business and to lengthen the maturity of its liabilities.
Security Bank recorded a higher net income in the second quarter of 2022 on the improved performance of its core businesses and lower credit provisions.
The bank booked an attributable net income of P3.52 billion in April-June, up by 139.4% from the P1.47 billion in the same period in 2021.
This brought its attributable net profit for the first half to P6.25 billion, more than double the P3.12 billion seen in the comparable year-ago period.
Security Bank is the country’s ninth largest lender in terms of assets with P796.78 billion and seventh in terms of capital with P123.41 billion as of end-June, based on Bangko Sentral ng Pilipinas data.
Its shares closed at P81.70 apiece on Monday, down by 1.57% or P1.30 from the previous finish. — Keisha B. Ta-asan
