UnionBank Raises PhP5.8 Billion Senior Bonds

UnionBank of the Philippines (PSE: UBP) fully raised PhP5.8 billion worth of new 3 year bonds to supplement its funding base, support business expansion plans and for other general corporate purposes. This is the second bond issuance by UnionBank, following an PhP11.0 billion bond issue last December 7, 2018.

The bank announced an initial PhP3 billion size, and ended up increasing the offer to almost twice after receiving strong demand from institutional and retail clients – allowing UnionBank to also price at the lower end of its guidance, eventually printing a coupon rate of 6.00%. The bonds will be issued on June 3, 2019 and listed on the Philippine Dealing Exchange (PDEx) on the same day.

“Our Peso bond issuance is part of our on-going efforts to diversify our funding sources and lengthen the maturity profile of our liabilities. This instrument allows us to comply with the new liquidity and funding ratios (LCR/NFSR) at a lower intermediation cost.” Said UnionBank SEVP, CFO and Treasurer, Jose Emmanuel Hilado.

This also brings UnionBank’s total issuance to PhP16.8 billion, of which PhP5.8 billion was drawn from the newly established PhP39 billion bond and commercial paper program. To further expedite issuances moving forward, UnionBank was also the first bank to issue under a programme style documentation patterned after international medium term note programmes. By aligning documentation for issuers that frequently tap the bond markets, UnionBank can shorten its execution timetable and capture funding opportunities more efficiently and effectively.

The Hongkong and Shanghai Banking Corporation Limited (HSBC) and ING Bank N.V. Manila Branch (ING) acted as Joint Lead Managers and Bookrunners for the transaction. HSBC and ING were also Selling Agents alongside UnionBank.