Ayala-led Bank of the Philippine Islands (BPI) has set up a medium term note (MTN) facility worth up to $2 billion to obtain flexibility in raising funds as needed.
The MTN program was recently approved by the bank’s board in this amount or its equivalent in other currencies, BPI said in a disclosure to the Philippine Stock Exchange on Thursday.
The 166-year-old bank said this was “part of the bank’s initiatives to maximize flexibility in accessing funding expediently.”
The issuance of notes under the program will be subject to market conditions and will be determined by requirements of the bank’s business, the disclosure said.
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An MTN program allows an issuer to have constant cash flow coming in from its debt issuance, typically with tenors of five to 10 years. This allows a company to tailor its borrowing to meet its financing needs. Such notes allow the issuer to register with the Securities and Exchange Commission (SEC) only once, using the shelf registration window, instead of every time for differing maturities.
A corporate MTN can be continuously offered by a company to investors through a dealer with investors being able to choose from different 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.
