Bank of Commerce lists largest bond issue to-date at Php18 billion

Strong demand from retail and institutional investors led San Miguel Corporation affiliate Bank of Commerce (BankCom), to achieve its largest peso bond offering to date, raising a record Php18 billion versus its minimum offer size of Php5 billion in less than three days.

The dual-tranche fixed rate bonds due 2027 (Series C Bonds) and fixed rate bonds due 2030 (Series D Bonds) exceeded the minimum offer size by 3.6 times, sprinting a short public offer period from January 28 to January 30, 2025 (12:00 noon).

“We appreciate the strong support of investors and are elated that one of our shortest peso bond offering has also become the largest in BankCom’s history. Their overwhelming response reflects their confidence in the bank’s strong fundamentals, and their preference for a clear and solid business strategy continues,” BankCom President Michelangelo Aguilar stated.

BankCom printed Php10.00685 billion in Series C Bonds which have a tenor of two (2) years and a fixed interest rate of 6.1942% per annum; and Php7.99315 billion in Series D Bonds with a tenor of five-and-a-quarter (5.25) years and a fixed interest rate of 6.3494% per annum. Interest is to be paid quarterly. The minimum investment amount was ₽100,000 with increments of Php50,000 thereafter.

The bonds, which were issued as the third tranche of BankCom’s increased Php50 billion Peso Bond Programme, were listed on the Philippine Dealing & Exchange Corp. (PDEx) on February 19, 2025.

Proceeds from the issuance will be used for management of the bank’s balance sheet, diversification of funding sources, and general corporate purposes.
As of September 2024, BankCom recorded a net income of Php2.2 billion, a 10% increase from Php2.0 billion reported in the previous year. Return on equity stood at 9.27%, more than double the bank’s IPO prospectus ROE of 4.22%.

The bank’s healthy profit was backed by growth in its core lending business. Net interest income was up by 11% year on year. Growth was registered across all lending segments.

The bank also saw growth on its service charges, fees, and commissions driven by revenues from its investment banking, credit card, and trust businesses.

BankCom appointed ING Bank N.V., Manila Branch (ING), Philippine Commercial Capital, Inc. (PCCI Capital), Security Bank Capital Investment Corporation (Security Bank Capital), and Standard Chartered Bank (SCB) as Joint Lead Arrangers and Joint Bookrunners for this issuance. BankCom also acted as a Selling Agent for the offering, together with ING, PCCI Capital, Security Bank Capital, and SCB.

THE BONDS ARE SECURITIES EXEMPT FROM REGISTRATION UNDER SECTION 9.1(E) OF THE SECURITIES REGULATION CODE AND ACCORDINGLY, WILL NOT BE REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE BONDS ARE NOT DEPOSIT INSTRUMENTS AND ARE NOT INSURED BY THE PHILIPPINE DEPOSIT INSURANCE CORPORATION.