UnionBank raises P18.168B from dual-tranche bonds

UNION BANK of the Philippines, Inc. (UnionBank) has raised P18.168 billion from its offerings of 1.5-year and three-year senior bonds held last month, its largest peso-denominated issuance under its current fundraising program.

“Strong demand” from both private and public investors led the listed bank to upsize its offer from the initial combined issue size of at least P2 billion, or P1 billion for each tenor, the Aboitiz-led bank said in a disclosure to the local bourse on Monday.

Broken down, UnionBank raised P10.3385 billion via the 1.5-year senior fixed-rate Series F bonds due 2025 with an interest rate of 6.5625% per annum.

Meanwhile, the lender raised P7.8295 billion through the senior fixed-rate three-year Series G bonds due 2026 that carry a yield of 6.68% per year.

The amount raised included proceeds from UnionBank’s bond exchange offer, under which it allowed holders of its fixed-rate Series C bonds maturing on Dec. 9 to sell them back to the lender in exchange for their subscription to any of the new bonds.

“Fueled by our passion to address the needs of our customers, we introduced the bond exchange program to provide a reinvestment option for existing investors,” UnionBank Treasurer and Head of Global Markets Johnson L. Sia said.

“We are grateful for the support of our investors as their confidence in the bank allowed us to raise our largest peso bond issuance to date,” Mr. Sia added.

The papers are part of UnionBank’s P50-billion bond program. They will be issued, settled, and listed on the Philippine Dealing & Exchange Corp. on Tuesday.

ING Bank N.V. Manila Branch and Standard Chartered Bank were the joint lead arrangers and bookrunners for the transaction. They were also the selling agents for the offer, along with UnionBank.

UnionBank saw its net income drop by 58.99% year on year to P1.65 billion in the third quarter as the bank set aside more loan loss provisions versus the prior year.

The bank’s shares declined by 25 centavos or 0.44% to close at P56.50 apiece on Monday. — AMCS