Aboitiz-led Union Bank of the Philippines said it raised P7.2 billion from the sale of Basel 3-compliant Tier 2 notes to finance the expansion of its lending and investment businesses.
Union Bank said the notes issue exceeded the target size of P5 billion “to satisfy the investing public.” The bank issued the notes on Thursday after it closed the offer period on November 13.
“We at Union Bank are very happy and delighted with the impressive pace. We surpassed our base offer target, causing the need to increase our issue size,” Union Bank president and chief operating officer Victor Valdepeñas said.
“The overwhelming demand of investors in our Tier 2 notes is not only testament to their belief in UnionBank and our continuing growth story, but also a vote of confidence in the sustainability and trust in our business,” he added.
The Tier 2 notes have a maturity of 10 years and one quarter, with an optional redemption after five years and a quarter. The notes bear an interest rate of 5.375 percent per year.
Proceeds will be used to beef up its capital to support its lending and investment businesses.
BDO Capital Investment Corp. was the issue manager, lead underwriter and selling agent of the notes, while China Banking Corp. served as co-underwriter. Other selling agents included China Bank and Multinational Investment Bancorporation, while Union Bank also served as limited selling agent.
As of end-2013, UnionBank and its subsidiaries had 238 branches as well as 235 on-site and 34 off-site automated teller machines nationwide.