BDO Unibank Inc. (BDO) on Monday began selling P10-billion Tier-2 notes, its first such sale under the Basel 3 regime.
“The issue will supplement BDO’s current capital position in further support of lending growth,” the bank said in a regulatory filing.
The Basel 3-compliant notes have a maturity of 10 years and one quarter, with an optional redemption after five years and a quarter.
The indicative yield ranges from 5 percent to 5.375 percent, with the final rate to be announced by the end of the offer period. The minimum investment amount is P500,000, with increments of P100,000 for each additional investment.
The bank said investors will have the opportunity to further diversify their investment portfolio with the offer. The sale runs from November 17 to 28. However, the bank reserves the right to shorten the offer period as needed.
Deutsche Bank AG Manila Branch, the Hongkong and Shanghai Banking Corp. and Standard Chartered Bank were appointed as joint lead arrangers and selling agents. The other selling agents are BDO and Multinational Investment Bancorporation.
BDO posted a net income of P16.8 billion in the first nine months of the year, and remains on track of hitting its full year target of P22.8 billion.
In the nine- month period, BDO breached the P1-trillion mark in gross customer loans on sustained growth across all segments, ending at P1.03 trillion in September, up by 22 percent from a year ago.
BDO saw total deposits up 19 percent to P1.4 trillion, supported by faster growth in low-cost deposits. These contributed to the 21-percent increase in year-to-date net interest income to P37.5 billion.
Non-interest income stood at P21.8 billion brought by steady results from fee-based services and treasury operations. Operating expenses ended the period at P36.9 billion.
BDO’s gross nonperforming loan (NPL) ratio continued to improve at 1.4 percent from 1.6 percent as of end 2013.
The bank continues to be well capitalized with a consolidated capital adequacy ratio of 14.1 percent and common equity tier 1 ratio of 12.7 percent under Basel 3.