Philippine National Bank (PNB), the financial arm of tycoon Lucio Tan, successfully returned to the offshore bond market, raising $300 million from a five-year sustainability bond offering.
This marks PNB’s first bond issue in five years and forms part of its $2-billion euro medium term note program, the bank said in a disclosure to the stock exchange Thursday.
The bank conducted a two-day roadshow starting Oct. 14, 2024 to attract potential investors. The bond was priced at T+102 basis points, with a fixed coupon rate of 4.85 percent.
PNB said there was strong interest in the offering, which was more than 3.6 times oversubscribed, totaling $1.1 billion from global investors.
Moody’s assigned a Baa3 investment grade rating to the bond.
“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,” said Francis Albalate, chief financial officer of PNB.
Investor interest was predominantly from the Asia Pacific region, accounting for 89 percent of the total.
By investor type, 67 percent were asset managers and hedge funds, 23 percent were banks and 10 percent included private banks and broker dealers.
PNB president Florido Casuela expressed gratitude for the support from global investors. “The result of this note offering is a clear indication of investors’ trust and confidence in PNB,” Casuela said.
He said the bank would use the funds for sustainable financing initiatives, strengthening its role in the Philippine banking system.
ING and J.P. Morgan acted as joint lead managers for the offering, with PNB Capital serving as the sole global coordinator and ING as the sole sustainability coordinator.
PNB posted a net income of P10.3 billion in the first half of 2024, a 5.6-percent increase from the previous year, resulting in a return on average equity of 10.5 percent.
The bank’s common equity tier 1 ratio of 18.5 percent is the highest among local banks in the Philippines.
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