PNB raises $300 million via bond offer

PHILIPPINE NATIONAL BANK (PNB) has raised $300 million from its maiden issuance of dollar-denominated sustainability bonds, marking its return to the offshore debt market after five years.

The bank’s benchmark-sized Sustainability Regulation S offering of five-year senior notes was met with strong demand, with the final order book reaching $1.1 billion or almost four times the initial offer, it said in a disclosure to the stock exchange on Thursday.

The five-year bond was priced at a fixed coupon rate of 4.85% or 102 basis points higher than the benchmark Treasury yield.

The bonds were issued out of PNB’s $2-billion euro medium-term note program.

“We are grateful for the support shown by global investors in our return to the international bond market after a five-year hiatus. The result of this note offering is a clear indication of investors’ trust and confidence in PNB. 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,” PNB President and Chief Executive Officer Florido P. Casuela said.

“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 Chief Financial Officer Francis B. Albalate said.

The bank conducted a two-day road show earlier this week to market the issue to investors.

Majority or 89% of the issue’s investors were from the Asia-Pacific region, while 11% were from Europe, the Middle East, and Africa, PNB said.

By investor type, 67% were asset managers and hedge funds, 23% were banks, and the remaining 10% were private banks, broker dealers and others, it added.

ING Bank and JPMorgan were tapped as the joint lead managers and bookrunners for the transaction, while PNB Capital and Investment Corp. was the sole global coordinator. ING also acted as sole sustainability coordinator for the issuance.

Moody’s Investors Service assigned an investment grade rating of “Baa3” to the bonds.

PNB last tapped the offshore debt market in 2019, raising a record $750 million via fixed-rate senior notes, more than double the $300-million target, as the order book reached $3.25 billion. These bonds were priced at 99.473% for a yield of 3.391% and a coupon rate of 3.28%.

The listed bank’s attributable net income inched down by 0.07% to P4.95 billion in the second quarter due to higher provisions.

This brought its net profit for the first semester to P10.22 billion, up by 4.72% year on year.

PNB shares went up by five centavos or 0.18% to close at P27.30 each on Thursday. — A.M.C. Sy