by Jan Michael Carpo, Reporter
In its second venture into the local debt market, the San Miguel-led Bank of Commerce raised PhP 6.57 billion recently from institutional and ordinary investors through its peso bond offering.
The fundraising effort was oversubscribed, surpassing the initial target of PhP 5 billion.
Security personnel at a Bank of Commerce branch in Molito (IMAGE CREDIT: https://mnltoday.ph/)
According to a Bank of Commerce press statement, “The offer was 1.3 times oversubscribed, indicating strong demand from institutional and retail investors.”
Starting May 16, the bonds, with a 1.5-year tenor and an annual fixed rate of 6.5635 per cent, will be listed on the Philippine Dealing and Exchange Corp. The funds will also be used to refinance maturing debt obligations.
In addition to Bank of Commerce, the joint lead arrangers, bookrunners, and selling agents were ING Bank Manila Branch and Philippine Commercial Capital Inc.
The Securities and Exchange Commission (SEC) did not require registration for the Series B bonds any more as they were exempt from registration requirements.
This fundraising marks the second phase of the bank’s P20 billion bond program. In July 2022, the bank raised P7.5 billion, more than double its initial P3 billion target.
The funds were used for general corporate purposes, diversifying funding sources, reducing interest rate risk, and managing the bank’s net interest margin by aligning long-term assets with long-term funding.
The bank’s primary loan sector saw substantial growth, resulting in a 55.7 per cent year-over-year increase in net income to P2.8 billion in 2023 from P1.8 billion the previous year.
The lender’s return on equity rose to 9.52 per cent at the end of 2023, up from 7.01 per cent in the previous year and more than double its initial public offering prospectus figure of 4.22 per cent.
As of the end of March, Bank of Commerce operated a network of 250 ATMs and 140 branches.
