Security Bank Corp. (SBC), one of the country’s leading banks, has set up a $1-billion medium-term note (MTN) facility, gaining leeway to raise fresh funds for expansion as needed in the future.
In a disclosure to the Philippine Stock Exchange yesterday, SBC said it had mandated foreign banks Citigroup, CLSA, MUFG and UBS as lead arrangers for the MTN program.
“With the establishment of the program, SBC will gain the flexibility to tap the international debt capital markets, subject to market conditions,” SBC said.
The MTN program allows an issuer to have constant cash flows coming in from its debt issuance, typically with tenors of five to 10 years. This allows a company to tailor its borrowings to its financing needs.
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These securities can be continuously offered by a company to investors through a dealer, with investors being able to choose from differing maturities. As such, they are different from corporate bonds because they can be offered to investors by the issuer’s agent instead of being underwritten by investment banks and then sold to the public in a tranche.
Based on the bank’s latest financial report, SBC’s capital expenditure commitment covers the following: investments in electronic systems to comply with regulatory requirements such as electronic money laundering monitoring system; investments in other systems such as for credit evaluation; upgrades of existing systems such as telecommunications system; expansion of the electronic banking channels; ATM installations; renovation or relocation of branch premises and, investments in new branches.
