DBP raises $300-M from global notes

Posted at 03/22/11 1:39 AM

MANILA, Philippines - The Development Bank of the Philippines (DBP) has successfully raised $300 million from a global notes offering amid a jittery market shaken by the widespread political unrest in the Middle East and the heavy damage from the earthquake and tsunami in Japan.

The 10-year senior bond was peddled at a spread of 95 basis points (bps) to 100 bps over the Republic of the Philippines 2021s. The coupon was fixed at 5.5% and the notes reoffered at 99.924. The notes mature on March 25, 2021. The issue was rated “BB” by both Standard & Poor’s and Fitch.

The DBP had tapped Credit Suisse, Goldman Sachs, HSBC and J.P. Morgan as joint lead managers and bookrunners for the offering.

“There was a break in the clouds and we decided to go ahead with the deal. The issuer also did not want to take the risk of the market turning over the weekend,” said one banker quoted by FinanceAsia, a business and finance publication specializing in the Asia Pacific region.

DBP president and chief executive officer Francisco F. del Rosario Jr. said the offer was positive news for both the bank and for the Philippines, in the light of market volatility.

“In fact, there were a total of 85 investors for the issuance, or over two-thirds of the bookings were from offshore investors while the rest of the bookings were from local investors,” Del Rosario added.

The strong response by the investor community was seen as a vote of confidence to the administration of President Aquino, and the stability of DBP.

“Investors cited DBP sound financial fundamentals driven by its strong capital adequacy levels, its critical role in supporting the social and economic development of the country, and its integral link with the government,” the DBP chief executive added.

DBP is the first government-owned and controlled corporation under the current administration to undertake a successful fund-raising initiative in the global market.

The bond issue should contribute to the P200-billion Public-Private Partnership (PPP) programs of the Aquino administration.

Also involved in the PPP initiative are other state-run financial institutions such as the Land Bank of the Philippines (LBP), Government Service Insurance System (GSIS) and Social Security System (SSS).

Last year, DBP planned to issue a peso global bond but saw the benefits of going to the dollar-denominated market.

According to FinanceAsia, the peso global bond market has been shut since the Philippine government completed its P54.7 billion ($1.25 billion) 25-year peso global bond at the start of this yea