ONE of the Philippines’ biggest lenders, the Bank of the Philippine Islands (BPI), on June 22 announced the offering of the country’s first peso-denominated bonds in direct response to the Covid-19 pandemic.
The bank aims to raise at least three billion pesos (US$60 million) through the issuance of Covid action response (CARE) bonds. The bonds will be launched as the third tranche of BPI’s 100 billion pesos bond programme.
The CARE bonds will have a tenor of 1.75 years and an interest rate of 3.05% per annum, paid quarterly in arrear, with the minimum investment amount set at one million pesos with additional increments of 100,000 pesos thereafter.
The offering will be open for subscription from June 22 to July 7, while the issue and listing date will be on August 7. The proceeds of the CARE bonds will be used to finance and refinance eligible micro, small and medium enterprises (MSMEs) under BPI’s sustainable funding framework. The Securities and Exchange Commission has confirmed that the CARE bonds qualify as social bonds under the Asean social bond standards in the Philippines.
MSMEs have been significantly affected by the pandemic and BPI recognizes that these enterprises, which account for a significant percentage of the country’s employment, are crucial to the growth and recovery of the economy. Supporting these businesses, the bank says, will also help create a more inclusive society where all Filipinos benefit from the country’s economic gains.
The CARE bonds supplement BPI’s efforts to support the recovery of MSMEs. Some of these initiatives include the loan payment deferral programme that allowed businesses to delay payments without interest charges, waiver of fees for online funds transfer transactions and discussions with the state-owned Philippine Guarantee Corporation to refine its loan products for qualified clients.
BPI Capital Corporation and HSBC are the joint lead arrangers of the CARE bonds.