Strong demand for PNB tier 2 notes

Philippine National Bank has raised US$82.8 million to finance asset growth and to allow it to maintain a strong capital base.

The Philippines’ fourth largest bank in assets raised the funds from an offering of 10-year debt notes qualifying as tier 2 or supplementary capital.

The coupon rate for the 10-year notes was set at 5.875% per annum, cheaper than the 6.75% per annum of its first tranche issued in June 2011. This offering represented the balance of the US$235.9 million subordinated debt the Bangko Sentral ng Pilipinas, the central bank, allowed PNB to issue.

PNB can redeem the bonds in the fifth year subject to central bank approval and certain conditions, including meeting capital adequacy ratio requirement.

“We are pleased with the success of this second tranche. Despite a number of competing issues in the market, the demand for the PNB tier 2 notes remained strong, reflective of investors’ positive credit outlook of the bank, thus allowing us to price the issue almost at par with the 10-year PDST-F benchmark,” said Horacio Cebrero, PNB executive vice president and head of treasury.

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