BPI raises P33.7 billion from SEED Bonds

BANK of the Philippine Islands (BPI) has raised P33.7 billion from its 1.5-year Sustainable, Environmental, and Equitable Development (SEED) bond offering, well above its P5 billion target, it said Friday.

“On behalf of BPI, I am honored to announce that our bond offering has been received with remarkable enthusiasm by our investors, resulting in a final issuance size of €33.7 billion. I think this is the largest issue we have had, and it is more than six times oversubscribed from our initial target of P5 billion,” BPI Senior Vice President, Treasurer and Global Markets Head Dino R. Gasmen said in a speech during the bond issue. listing ceremony held at the Philippine Dealing & Exchange Corp. (PDEx) on Friday.

A third of the total number of investors in the issue were institutional or non-retail, while the rest came from the high net worth and retail segments, Mr Gasmen said.

Demand for the bonds has been high as sustainability-themed investments have gained ground in recent years, he added.

“For example, if I’m going to invest in a bond, I want to invest in ESG (environmental, social and governance) so I can say I’m doing something on the sustainability side,” he said.

The issuance of SEED Bonds marked the third tranche of BPI’s P100 billion bond program, approved in May 2022.

The offer marked BPI’s first foray into sustainable bonds, the company said in a statement to the stock exchange.

The papers were priced at 6.2% per annum, payable quarterly. BPI sold the bonds from July 19 to August 1, closing the offering period a day earlier than the original schedule due to strong investor demand.

The net proceeds from the SEED bonds will be used to finance or refinance new or existing eligible green and/or social projects, in accordance with the Sustainable Funding Framework, BPI previously said.

It added that it will use the offer as an opportunity to promote projects that contribute to the United Nations Sustainable Development Goals.

BPI Capital Corp. and Standard Chartered Bank were the joint lead arrangers and sales agents for the bond offering.

Mr Gasmen said on Friday that proceeds from the SEED Bonds offering will help finance BPI’s current portfolio of green and social loans.

“The point is that some of them will mature before the bond matures, so there will be a shortage. But our lenders are confident that they will be able to find assets to replace the maturing assets,” he said.

“It is very important that we find the right assets that fit our sustainability framework. We don’t want to be accused later of what they call greenwashing. That is the most important thing we want to protect because it affects your reputation as an issuer,” Mr Gasmen said.

The bank’s low-cost current and savings accounts (CASA) are also sufficient for BPI’s financing needs, he said.

“We have found that the bank’s CASA deposits are very stable. So if CASA deposits grow, it will be very difficult for me to justify issuing a bond,” Mr Gasmen said. BPI officials previously said they would like to issue peso bonds with a sustainability theme on a quarterly basis, although this would depend on their financing needs.

BOND LISTINGS ON LOCATION TO ACHIEVE GOALS

BPI’s latest bond listing brought the total issuance volume of 14 companies to P266.4 billion year-to-date, PDEx President and Chief Executive Officer Antonino A. Nakpil told reporters on the sidelines of the ceremony on Friday.

This puts the PDEx on track to achieve its target of P400 billion in corporate bond issuances this year, he said.

Trading volume on the exchange reached P1.1 trillion in July, the highest since P900 billion in March 2013, Mr. Nakpil added.

He noted that there were six primary market issuances last month, three of which had an ESG theme. Two of these were from the Ayala group, he added.

BPI’s net profit grew 17.5% year-on-year to P15.3 billion in the second quarter on higher revenues. —AMC Sy