by Erik dela Cruz/BMirror/11.25.08
BANK of the Philippine Islands (BPI), the country’s biggest lender by market value, on Tuesday began offering 10-year bonds to the public worth P5 billion.
The offer represents the first tranche of P15-billion subordinated notes that BPI will sell to raise money to fund acquisitions.
“The offer runs until December 5,” said Girtie Sinio, BPI investor relations officer. “We have approval to issue up to P15 billion.”
The notes are offered at a yield of 8.45 percent, Bloomberg News reported.
Fitch Ratings has assigned an “investment-grade” rating to BPI’s proposed subordinated notes, which qualify as lower Tier-2 capital.
The international debt watcher said in a statement it had assigned a “AA+(ph1)” national long-term rating to BPI’s notes, which will be direct, unsecured and subordinated obligations of the Philippines’ biggest lender by market value.
An “AA” rating denotes expectation of “very low” credit risk, according to Fitch. Such rating indicates “very strong capacity for payment of financial commitments” and that such capacity “is not significantly vulnerable to foreseeable events.”
The rating on the proposed notes is one notch below BPI’s national long-term rating of “AAA(ph1),” which Fitch assigned on November 11 this year.
“The rights of the noteholders will be subordinated to the claims of depositors and other senior creditors, but senior to share capital,” Fitch said.
In October, BPI said it planned to use the supplementary capital for “possible acquisition opportunities” which is widely believed to include the Philippines’ largest insurer, Philippine American Life and General Insurance Co. or Philamlife.
BPI is also partly owned by Southeast Asia’s largest lender, DBS Bank of Singapore.
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