PNB raises P3.5B from debt notes offering

MANILA, Philippines—The tycoon Lucio Tan-led Philippine National Bank has raised P3.5 billion from a fresh offering of 10-year debt notes qualifying as tier 2 or supplementary capital.

In a disclosure to the Philippine Stock Exchange on Thursday, the bank reported that it was able to close the offering earlier than scheduled due to strong demand for these subordinated notes.  The coupon rate for the 10-year notes was set at 5.875 percent per annum, cheaper than the 6.75 percent p.a. fetched by its first tranche issued in June 2011.

This offering represented the balance of the P10-billion subordinated debt that the Bangko Sentral ng Pilipinas has allowed PNB to issue.’

“We are pleased with the success of this second tranche.  Despite a number of competing issues in the market, the demand for the PNB tier 2 notes remained strong, reflective of investors’ positive credit outlook of the bank, thus allowing us to price the issue almost at par with the 10-year PDST-F benchmark,” said PNB executive vice president and head of treasury Horacio Cebrero III.

ING Bank was the lead manager and sole bookrunner for the issue.  The offering was originally planned to run until May 4.

PNB has the right to redeem the bonds In the fifth year subject to BSP approval and certain conditions, including meeting the capital adequacy ratio requirement.

The net proceeds of the notes issuance will be used to finance the bank’s asset growth. This fund-raising is also expected to allow the bank to maintain a strong capital base.

PNB, which is in the process of merging with the Allied Banking Corp., ended 2011 with a capital adequacy ratio of 21.65 percent.



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