BDO Unibank, Inc. (BDO) yesterday started offering fixed-rate bonds totaling P5 billion as part of the bank’s continuing efforts to diversify its funding sources and support its lending activities.
The offer period will run up to January 24, with the issue date targeted for February 3, 2020.
The minimum investment is P100,000 with increments of P50,000.
BDO, in a statement, said the latest offer is a component of the P100 billion bond program approved by the Board of BDO in August 2018 and follows the P35 billion fixed rate bond issuance in February last year.
The bonds will have a tenor of 2.5 years and will be priced at 4.408 percent.
BDO said interest will be paid quarterly, calculated on a 30/360 count basis.
The Hong Kong and Shanghai Banking Corp. Ltd. is the sole lead arranger and bookrunner for the issue, while BDO Unibank Inc., BDO Private Bank Inc. and HSBC are the selling agents.
A fixed-rate bond is a long-term debt instrument that pays a fixed coupon rate for the duration of the term. As long as the bond issuer does not default or call in the bonds, the bondholder can predict exactly what his return on investment will be.
BDO’s P35-billion issuance last year was the largest ever single peso bond issuance by a Philippine bank, following the bank’s $150 million Green Bond in 2018, its $1.2B stock rights offering in 2017, and its $700-million senior note issuance, also in 2017, which is considered to be the largest dollar issuance by a Philippine bank to date.
