Philippine lender Security Bank on August 20 raised 20 billion pesos (US$353 million) in its latest bond issuance and biggest fund raising in the domestic debt capital market. The bonds have a tenor of five years and one month, and pay a coupon of 6.05% per annum.

The offering was upsized from the initial minimum amount of 5 billion pesos on the back of strong investor demand. The issuance enables the bank to diversify its funding sources, with the proceeds earmarked to support its lending activities

Philippine Commercial Capital is the sole bookrunner for the transaction, as well as a joint lead arranger and selling agent, along with SB Capital Investment Corporation.

The peso-denominated bond is the second fund raising for Security Bank this year after it accessed the US dollar bond market in May in which it priced a US$400 million deal. The Reg S five-year bond carried an interest rate of 5.50%, equivalent to a spread of 110bp over the US treasuries. This was 30bp tighter than the initial price guidance of 140bp as the issuance garnered more than US$1.5 billion worth of demand from global fund and asset managers, banks, insurance companies, private banks and other institutions.

MUFG Bank and UBS were the joint global coordinators for the transaction as well as joint bookrunners along with Standard Chartered and SB Capital.

The latest domestic bond issuance of Security Bank came about a week after it reported its performance in the first half of 2024, in which it posted an 11% increase in net profit to 5.4 billion pesos compared to a year ago. It says total revenues grew 24% year-on-year to 25.7 billion pesos, with net interest income rising 38% to 21.7 billion pesos.

Net interest margin was 5.20% in the first half, up 96bp year-on-year. Service charges, fees and commissions surged 74% to 4.9 billion pesos, while operating expense was 20% higher, driven by investments in manpower and technology to accelerate its transformation strategy.