Philippines’ DBP reports successful issuance of first Basel III compliant bonds

Issue is twice oversubscribed.

State-owned Development Bank of the Philippines has successfully closed the order book on the first Basel III compliant Tier 2 Fixed Rate Unsecured Subordinated Notes. It exceeded the target issue size of P5 billion, raising P10 billion on the back of strong demand. DBP’s Tier 2 Note complies with the Basel III regulations of the Bangko Sentral ng Pilipinas, the central bank, which take effect in January 2014. It had a tenor of 10 years with a call option on the fifth year and a competitive coupon of 4.875%.

The expected issue and settlement date of the security is on November 20. The proceeds replace DBP’s lower Tier 2 Note which was redeemed last September 2. This boosted the bank’s capital base and supports the growth of the bank’s portfolio that is focused on developmental lending.