The Union Bank of the Philippines (UBP) on Monday announced the sale of P5 billion in fixed -rate unsecured subordinated Basel 30-compliant Tier-2 notes.
UBP President and COO Victor B. Valdepeñas said the sale represents the first tranche of a P10-billion sub-debt note offering. He said the other P5 billion should be issued soon.
Sy-led BDO Capital & Investment Corp. (BDO Capital) and China Banking Corp. (China Bank) were appointed issue manager and lead underwriter and underwriter, respectively.
“China Bank and BDO are here because the Sy family believes in you. We’re supporting you and we believe in you and we believe in the bank. BDO and China Bank support this offer wholeheartedly and we know you will do very well,” BDO Capital President Eduardo Francisco said.
BDO Capital Senior Assistant Vice President Ronaldo Reyes said insurance companies are allowed to invest in the Tier-2 notes due 2025.
“We have the approval from Insurance Commission,” he said.
The notes qualifying as Tier-2 capital under Basel 3 will mature in 10 years and three months from the issue date of each tranche.
China Bank First Vice President Virgilio Chua said the public offer is set from November 4 to 12 and the issue and settlement date is on November 19.
The indicative interest rate is 5.5 percent to 6 percent based on a 3-day simple average of the 5-year Philippine Dealing System Treasury-Reference Rate preceding and including the pricing date plus an indicative spread of 1.5 percent to 2 percent.
It has minimum denominations of P500,000 and sold in increments of P100,000 thereafter.
The bank has a network of 243 branches to help sell the IOUs nationwide.