Union Bank of the Philippines (UnionBank) executed the country’s first public non-sovereign bond exchange concurrent with the issuance of the bank’s dual-tranche bond offering.
The bond exchange was announced on December 4 in its filing with the Philippine Stock Exchange. It extends to holders of UnionBank’s 8.115 billion Philippine peso (US$146.70 million) 2.75% fixed rate series C bonds, due December 9 2023, the option of selling the bank’s bonds in exchange for subscription to any of the new bonds. The bond exchange settlement date is on December 4 2023 with 236.7 million pesos of bonds to be exchanged for the new bonds.
“Fuelled by our passion to address the needs of our customers,” says UnionBank treasurer and head of global markets Johnson Sia, “we introduced the bond exchange programme to provide a reinvestment option for existing investors.”
The bond offering raised 18.168 billion pesos comprising of 10.3385 billion pesos of 1.5-year series F bonds due 2025 with an interest rate of 6.5625% and 7.8295 billion pesos three-year series G bonds due 2026 with an interest rate of 6.68%.
This is the largest bond issuance by UnionBank from its 50-billion-peso bond programme, which received strong demand from both retail and institutional investors. The strong response enabled the bank to upsize the issuance to over nine times its initial minimum offer size of 2 billion pesos for two tranches. The new bonds will be issued and listed on the Philippine Dealing & Exchange Corporation on December 5 2023.
ING Bank (Manila) and Standard Chartered are the joint lead arrangers and bookrunners for the new bonds, as well as the selling agents together with UnionBank.