UnionBank looks to raise at least P10B from dual-tenor bond offer

UNION BANK of the Philippines, Inc. (UnionBank) is looking to raise at least P10 billion from its dual-tenor bond offer, eyeing P5 billion from each tranche.

The listed bank on Wednesday began its public offering of 1.5-year senior fixed-rate Series H bonds due 2026 and three-year senior fixed-rate Series I bonds due 2028, it said in a disclosure to the stock exchange.

The offer is set to run until June 19, unless ended earlier by the bank. The papers are set to be issued, settled, and listed on the Philippine Dealing and Exchange Corp. on June 26.

“The bonds will be offered with a minimum aggregate principal amount of P5 billion per tranche, with an oversubscription option,” UnionBank said.

The papers will be issued out of the bank’s expanded P100-billion peso bond program approved by its board of directors on Feb. 28.

UnionBank priced the 1.5-year notes at 5.88% per annum, while the three-year bonds carry a rate of 6.02% per annum.

The papers are being sold for a minimum investment amount of P100,000 and in multiples of P50,000 thereafter.

ING Bank N.V. Manila Branch, Philippine Commercial Capital, Inc., and Standard Chartered Bank have been appointed as the joint lead arrangers and bookrunners for the transaction.

They will also act as selling agents together with UnionBank.

UnionBank last tapped the domestic bond market through an offering of 1.5-year and three-year senior bonds in December 2023 from which it raised P18.168 billion. This was higher than the initial combined issue size of at least P2 billion, or P1 billion for each tenor.

Broken down, it raised P10.34 billion via the 1.5-year senior fixed-rate Series F bonds due in 2025 with an interest rate of 6.5625% per annum and P7.8295 billion through the senior fixed-rate three-year Series G bonds due in 2026 with an annual yield of 6.68%.

UnionBank saw its attributable net income decline by 28.93% year on year to P1.4 billion in the first quarter due to one-time write-offs from a subsidiary and front-loaded non-recurring costs.

Its shares climbed by five centavos or 0.15% to close at P33.20 apiece on Wednesday. — A.M.C. Sy