Government-owned bank in Philippines’ biggest public issuance

Land Bank of the Philippines said it raised P10.5 billion from the sale of Tier-2 notes.

The Philippines’ largest government-owned bank has just raised the largest amount for a debt issue in Philippine banking history.

Land Bank of the Philippines said it raised P10.5 billion from the sale of Tier-2 notes amid strong market demand for its debt issue. It originally meant to raise P6.5 billion.

LandBank, however, wound-up borrowing P10.5 billion during the entire offer period for the securities, which ran from January 9 to 20, on low interest rates fetched by the securities amid high market liquidity that kindled investor demand.

The oversubscribed notes achieved the lowest coupon for a Tier 2 transaction and marked the largest public peso bank issuance in the domestic market.

LandBank said strong demand for the notes allowed it to price it at the tightest end of its indicative pricing guidance, setting the coupon at 5.875% per annum after initially announcing a range of 6.0%.

“We are very pleased with the results of our capital raising exercise. The Tier 2 Notes will further strengthen LandBank’s capital ratios and provide us significant room to continue pursuing our mandate of supporting countryside development,” said Gilda Pico, President and Chief Executive Officer.

LandBank is also the fourth largest bank in the Philippines in asset size, and is one of the biggest government-owned or controlled corporations.

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