Philippine National Bank (PNB) saw strong demand for its sustainability bonds worth $300 million as subscriptions reached $1.1 billion, marking a successful return to the international debt market after five years.
In a disclosure to the Philippine Stock Exchange on Thursday, PNB said the five-year senior notes for sustainability financing drew 3.6 times oversubscriptions from global investors following a two-day road show that began on 14 October.
“The result of this note offering is a clear indication of investors’ trust and confidence in PNB,” PNB president Florido Casuela said.
“This offering will fund the bank’s sustainable financing initiatives as we continue to solidify our position among the forerunners of nationwide development across the Philippine banking system,” he added.
Issue priced
The new bonds were priced at T+102 basis points and had a fixed coupon rate of 4.85 percent. PNB said the bond offer received an investment grade rating of Baa3 from Moody’s.
PNB shared that the majority of investors or 89 percent were based in Asia Pacific while the remaining 11 percent were from Europe, the Middle East and Africa.
Most investors or 67 percent were asset managers while banks accounted for 23 percent. Brokers and others made up the remaining 10 percent.
We believe this is an ideal time to return to the market, given the reduction in interest rates complemented by the bank’s improved core banking activities. We have already enhanced our banking operations and processes to support continuous growth as we expect our business to further strengthen in the future.
PNB said the $300 million bonds are part of its $2 billion Euro Medium Term Note Program.
PNB chief financial officer Francis Albalate said the demand for the new bonds was supported by easing interest rates amid economic growth in many countries.
“We believe this is an ideal time to return to the market, given the reduction in interest rates complemented by the bank’s improved core banking activities. We have already enhanced our banking operations and processes to support continuous growth as we expect our business to further strengthen in the future,” he said.
PNB grew its net income in the first half of the year to P10.3 billion, up by 5.6 percent from P9.7 billion recorded in the same period a year ago.
The bank attributed the growth to a higher net interest income of P24 billion compared to P21.6 billion last year.