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Philippine National Bank, the country's fifth largest bank, successfully concluded the offering of Tranche II of its Unsecured Subordinated Notes Qualifying as Tier 2 Capital on May 2, 2012.
The PNB Tier 2 Notes generated strong market demand, prompting PNB to close the offering earlier than the scheduled end of offer date.
Proceeds of the issuance will be used to finance asset growth and further enhance the bank's capital base.
PNB can issue up to a maximum of P3.5 billion, the remaining balance of the P10.0 billion approved by Bangko Sentral ng Pilipinas last year. In June 2011, PNB had already issued P6.5billion of Tier 2 Notes.
According to Mr. Horacio E. Cebrero III, PNB's Executive Vice President & Head of Treasury Group, "We are pleased with the success of this second tranche. Despite a number of competing issues in the market, the demand for the PNB Tier 2 Notes remained strong, reflective of investors' positive credit outlook of the bank, thus allowing us to price the issue almost at par with the 10-year PDST-F benchmark".
The coupon rate for this second tranche has been set at 5.875 percent p.a., lower by 87.5 bps vs. the 6.75 percent coupon of the initial tranche; and will be fixed until the maturity of the notes in 2022.
PNB has the right to redeem the notes after the end of the 5th year, subject to certain regulatory conditions.
ING Bank N.V., Manila Branch was the lead manager and sole bookrunner for the issue. Selling Agents included ING, First Metro Investment Corp. and Multinational lnvestment Bancorporation while PNB, PNB Capital and Investment Corp. and Allied Banking Corp. were limited selling agents.
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