Debt watcher Fitch Ratings gave an investment-grade score of ‘BBB-’ to the recent $300-million senior notes issued by BDO Unibank Inc. under its $2-billion medium-term note program.
“The senior notes are rated at the same level as BDO’s ‘BBB-’ long-term foreign-currency issuer default rating. This is because the notes will constitute direct, unconditional, unsubordinated and unsecured obligations of the bank, and will rank equally with all its other unsecured and unsubordinated obligations,” Fitch said in a statement.
The transaction was three times oversubscribed and was the lowest ever coupon for any US dollar bond for a Philippine issuer. The notes will mature in 2021.
The issue was priced at 2.63 percent with a maturity of five years. The bonds were earlier rated Baa2 (investment grade) by Moody’s Investors Service. Standard Chartered Bank and UBS AG acted as joint lead arrangers for the transaction.
The issuance was a part of BDO’s liability management initiatives to tap longer-term funding sources to support dollar-denominated projects and effectively refinance outstanding bonds worth $300 million maturing in February next year.
Moody’s assigned a provisional investment grade rating of ‘Baa2’ to the $2-billion medium-term note program that was established by BDO in 2012. The rating also applied to BDO branch in Hong Kong.
BDO said the establishment of a $2-billion euro medium-term note program would enable the bank to manage its liabilities.
BDO, the country’s largest lender controlled by tycoon Henry Sy, posted a 10-percent increase in net income in the first nine months of 2016 to P19.3 billion from a year ago, on strong loans and deposits.
