State-owned Development Bank of the Philippines (DBP) successfully closed the order book for its first Basel III compliant Tier 2 fixed-rate unsecured subordinated notes in the Philippines, Standard Chartered Bank, the sole Global Coordinator for the issue, said.
Standard Chartered announced the early close of offering on November 8, days before end of the offer period to the general public. It noted that the expected issue and settlement date of the security is on November 20.
Standard Chartered said that strong demand supported the DBP notes’ target issue size of P5 billion to exceed up to P10 billion.
DBP’s Tier 2 note is compliant to Bangko Sentral ng Pilipinas’ Basel III regulations, which will take effect in January 2014.
The Basel III regulations have the following terms: Tenor of 10 years with a call option on the fifth year; and a competitive coupon of 4.875 percent.
Standard Chartered added that the proceeds replace DBP’s lower Tier 2 notes, which were redeemed on September 2, strengthening the bank’s capital base and supporting the growth of the institution’s portfolio which is focused on developmental lending.
“It has been truly a great result for DBP and the market as a whole with the overwhelming support from both retail and institutional investors, testament to the bank’s excellent results and financial management and the outstanding leadership of its current board and senior management,” said Lynette Ortiz, Standard Chartered Bank Philippines managing director and head of global markets.
Ortiz added that DBP’s issue sets the benchmark for Basel III compliant securities in the country, while providing long-term funding and capital strength to a solid government financial institution in support of the country’s developmental initiatives.
Standard Chartered led the effort as the sole global coordinator, and joint lead manager and selling agent alongside a roster of strong investment houses acting as other joint lead managers and selling agents: BPI Capital Corp.; Deutsche Bank AG and PNB Capital and Investment Corp.
SB Capital acted as co-lead manager and selling agent, and Multinational Investment Banking Corp. as market maker and selling agent. DBP acted as limited selling agent for its own issue.