BDO UNIBANK, INC. is planning to issue five-year dollar-denominated bonds, it said on Monday.
The bank has tapped Standard Chartered Bank as sole global coordinator and alongside MUFG and Wells Fargo Securities as joint lead managers and joint bookrunners to arrange a series of fixed income investor calls that were set to start on Monday.
“A USD-denominated Regulation S only five-year fixed rate senior unsecured benchmark offering may follow, subject to market conditions,” it said in a disclosure to the stock exchange.
Details on the timing, pricing, and issue size were not immediately available.
Demand for the issuance is expected to be supported by the low interest rate environment, April Lynn Lee-Tan, chief equity strategist at COL Financial Group, Inc., said in a Viber message.
The timing of the bond offer is “strategically defensible,” considering elevated US Treasury yields and the dollar’s strength, Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said in a Viber message.
“That means borrowing in dollars is not ‘cheap’ in absolute terms. At the same time, pressuring US government fiscal dynamics and volatility in yields make the funding window more interesting for some emerging-market issuers: locking in debt now for medium-term use could avoid even higher rates later, or at least hedge against rising funding costs.”
He said the issuance could attract strong interest, mainly from global debt fund managers, regional Asian investors, and US dollar fixed-income funds that follow Asia-Pacific issuers.
“BDO’s credit ratings (Baa2 from Moody’s, BBB- from Fitch) give it investment-grade status, which helps access a wider investor base. However, the strong dollar could deter some cross-border buyers that are sensitive to currency risk, unless BDO offers a premium to compensate,” he said.
The notes could be priced at the 4.5% to 5% range, assuming a “modest” risk premium and considering current Treasury yields, he added.
“Overall, I view this as a well-calibrated move by BDO: not overly aggressive, but opportunistic. It shows confidence in its lending franchise and capital structure, and it reflects a proactive approach to managing funding diversity. If executed well, it could strengthen BDO’s liability profile and support its medium-term growth — but BDO must remain disciplined on how it deploys the proceeds and manage the foreign exchange risks that come with dollar borrowing.”
BDO last tapped the offshore debt market in May 2022, raising $100 million from the issuance of seven-year blue bonds through an investment from the International Finance Corp. This marked the first private sector blue bond issuance in Southeast Asia.
The bank’s attributable net income rose 6.1% year on year to P22.47 billion in the three months through September on the sustained expansion of its core businesses.
This brought its nine-month earnings to P63.09 billion, 4.07% higher than a year earlier.
BDO shares declined by P2.50 or 1.9% to close at P129 each on Monday. — Aaron Michael C. Sy
