The Development Bank of the Philippines kicked off its fund-raising activities this year through a successful US$300 million10-year offshore bond offering and capitalizing on a market that is hungry for safe and higher-yielding investment instruments amid a tepid economic environment, a top official said.
DBP President and Chief Executive Officer Emmanuel G. Herbosa said the total order book of the dollar-denominated bonds peaked at over US$1 billion in mid-morning London time before settling at US$500M, which is 3.6 times oversubscribed.
“The bond has a coupon rate of 2.375 percent per annum and was priced at 99.594 to yield 2.421 percent,” Herbosa said.
“The brisk demand for the DBP bonds reflects the overall positive sentiment of the international market, which views DBP as a strong and stable Philippine financial institution.”
DBP is the seventh largest bank in the country in terms of assets and provides credit support to four strategic sectors of the economy – infrastructure and logistics, MSMEs, social services and community development, and the environment.
The issuance is the bank’s second US dollar offering in the foreign bond markets since March 2011.
The bonds will mature by March 11 of 2031 and has been rated ‘BBB’ by Fitch Ratings, due to high probability of support from the national government.
Herbosa said the order book was diversified across various investors with the bulk or about 73 percent coming from the Asia Pacific region with the remaining 23 percent from the Europe, Middle East and Africa territories.
He said a significant portion of the bonds were purchased by fund managers at 74 percent followed by banks and financial institutions at 16 percent and other investors at 10 percent.
DBP Executive Vice President for Treasury and Corporate Finance Roda T. Celis said proceeds would be used to refinance the Bank’s US$300M bond maturing this year and for general corporate activities. – Press release
April 17, 2024
