UnionBank launches P10-B bonds after redeeming debt ahead of costly reset

The Aboitiz family-led Union Bank of the Philippines is raising at least P10 billion, tapping the debt market anew with a fresh offering of 1.5-year and 3-year peso bonds, priced at 5.88 percent and 6.02 percent per annum, respectively.

This comes just after the bank redeemed its P6.8-billion 5.25 percent Tier 2 notes ahead of a 2025 rate reset that could have pushed yields higher.

The new bonds will be issued under UnionBank’s expanded P100-billion bond program.

UnionBank kicked off the offering on Wednesday with at least P5 billion each for the Series H (1.5-year) and Series I (3-year) bonds, with the option to raise more depending on demand. The public offer runs from June 4 to 19, with Philippine Dealing & Exchange Corp. listing set for June 26.

ING, PCCI Capital, and Standard Chartered Bank are lead arrangers and joint selling agents alongside UnionBank.

Meanwhile, the bond program was doubled to P100 billion last May 9—about 18 months after the cap was raised to P50 billion in October 2023.

Originally launched in 2019 at P39 billion, the bond program has steadily expanded as UnionBank scales up its financing options.