MANILA, Philippines – Even if Philippine Savings Bank (PSBank) was dragged into the ongoing impeachment trial against Chief Justice Renato Corona, investors have been flocking to the counter to buy its bonds.
In a disclosure to the stock exchange on Monday, February 13, PSBank said its recently offered and AAA-rated debt notes worth P3 billion were twice oversubscribed, an indication that confidence in the bank remains strong.
“[PSBank] closed the offer period for its Tier 2 Notes a week earlier due to overwhelming demand. The book was more than 2x oversubscribed,” it said.
In an investment environment where the central bank has slashed interest rates to record lows, investors who are hungry for yields snapped the 10-year debt paper even if it carried a 5.75% interest rate, lower than the initially floated rate of 5.875%.
The bank has been selling P3-billion worth of these investment instruments since early February, but investors have placed orders of up to P6 billion, prompting the sellers to end the offer period earlier than the February 16 deadline.
During this sale period, the impeachment trial against one of PSBank’s high profile clients, Chief Justice Renato Corona, has been underway. On the 4th week of the trial, PSBank President Pascual Garcia took the witness stand twice to answer questions about Corona’s around P20 million peso-denominated bank accounts maintained with its Katipunan branch in Quezon City in 2010.
However, on Thursday, February 9, the Supreme Court heeded PSBank’s request to halt further inquiries about Corona’s dollar-denominated deposits, citing a bank secrecy law.
PSBank, the thrift bank arm of the Metrobank group, is the second largest thrift bank in the country with over 70% of its lending business focused on housing and auto loans.
Metropolitan Bank & Trust Co. (Metrobank) is the 2nd largest bank in the country in terms of assets (The largest is Banco de Oro). Metrobank is controlled by tycoon George Ty whose holding firm, GT Capital, has stakes in real estate (Federal Land), power (Global Business Power), insurance (Philippine AXA Life), car dealing (Toyota Motor Philippines), and is eyeing to expand into other businesses.
Proceeds of PSBank’s bond notes will used to expand its current nationwide branch network of almost 200 and further strengthen its capital base, it told the exchange. – Rappler.com