UnionBank raises P18.2B via dual-tranche offering

ABOITIZ-LED Union Bank of the Philippines (UnionBank) said Monday that it had successfully raised P18.168 billion from a dual-tranche offering of Philippine peso-denominated fixed-rate bonds.

The 1.5-year senior fixed rate Series F bonds due 2025 and three-year senior fixed rate Series G bonds due 2026 raised a total of around P10.34 billion and P7.83 billion, respectively.

The Series F bonds carry an interest rate of 6.5625 percent per annum, while the Series G bonds have an interest rate of 6.68 percent per annum.

UnionBank said the new bonds — said to be the largest issuance under its P50-billion bond program — received strong demand from both retail and institutional investors, allowing the bank to upsize the issuance to over nine times the initial minimum offer size of P2 billion for both tranches.

Concurrent with the issuance, the bank extended to holders of its P8.115 billion series C bonds, with a fixed rate of 2.750 percent and due Dec. 9, 2023, the option to sell such to the bank in exchange for a subscription to any of the new bonds.

Get the latest news

delivered to your inbox

Sign up for The Manila Times newsletters

By signing up with an email address, I acknowledge that I have read and agree to the Terms of Service and Privacy Policy.

“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,” said Johnson Sia, the company’s treasurer and head of global markets.

“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,” Sia added.

UnionBank said the bond exchange Monday with P236.7 million worth of bonds to be exchanged with the new bonds.

The new bonds, offered from November 20-24, will be issued and listed on the Philippine Dealing and Exchange Corp. on Dec. 5, 2023.

ING Bank N.V.’s Manila Branch and Standard Chartered Bank were the joint lead arrangers and bookrunners for the new bonds. Along with UnionBank, they were also the selling agents for the new bond offering.

In the first three quarters of the year, UnionBank’s consolidated net income fell 20 percent to P8.1 billion from P10.13 billion a year earlier on increased expenses during the period.

Operating costs were said to have widened by 63 percent to P33.5 billion from P20.5 billion due to the full-year impact of the Citi consumer business and its digital banking arm.

Net revenues, meanwhile, jumped by 48 percent year-on-year to P52.8 billion, with net interest income surging by 34 percent to P37.3 billion as the bank’s loan portfolio expanded by 18 percent.

On Monday, UnionBank shares were down 40 centavos, or 0.7 percent, at P56.35 each, while the benchmark Philippine Stock Exchange index ended up 0.22 percent.