Security Bank Successfully Raises $400 Million Through Senior Unsecured Notes for Expansion

Securing Capital for Growth

Security Bank Corp., one of the Philippines’ leading financial institutions, has successfully raised $400 million through the issuance of senior unsecured notes. This strategic financial move, announced in a recent stock exchange filing, is set to bolster the bank’s expansion plans, enhancing its services and reach across the nation.

Terms of the Issuance

The notes, which are part of the bank’s ambitious $1-billion medium-term note program, were issued with a fixed interest rate of 5.5% per annum, maturing on May 14, 2029. The offering was initially guided at US treasuries plus 140 basis points and is expected to settle by May 14, 2024.

Record-Breaking Demand

The demand for Security Bank’s debt issuance was remarkably high, with orders surpassing $1.5 billion. This overwhelming interest covered the final book size more than 3.75 times, marking the largest order book size in Security Bank’s history of debt issuances. Such robust demand underscores the market’s strong confidence in the bank’s credit strength and future growth trajectory.

Global Participation

The issuance attracted significant attention from a diverse group of global investors, including fund and asset managers, banks, insurance companies, and private banking institutions. MUFG and UBS served as joint global coordinators for the transaction, while Standard Chartered Bank and SB Capital acted as joint bookrunners, ensuring a smooth and successful issuance process.

Expanding the Branch Network

In line with its growth strategy, Security Bank has disclosed plans to open 72 new branches within the next two to three years. This expansion is part of a P1-billion initiative aimed at reaching more customers in underserved areas and bolstering its customer base. Currently, the bank operates 328 branches nationwide and anticipates opening its 350th branch by year-end.

Strong Market Confidence

Arnold Bengco, Security Bank’s Executive Vice President and Head of the Financial Markets Segment, expressed satisfaction with the successful pricing and strong demand for the bond issuance. He noted that the transaction reflects the market’s continued confidence in Security Bank’s stability and growth prospects.

Conclusion

The successful $400 million debt issuance by Security Bank sets a solid foundation for its planned expansion and is a testament to the confidence investors have in the bank’s future. As Security Bank continues to grow its network and enhance its offerings, it remains a formidable entity in the Philippine banking sector.

This article discusses Security Bank’s strategic move to raise capital through debt issuance, highlighting the successful funding round and its implications for the bank’s expansion and overall growth strategy in the Philippine market.