LandBank raises P10.5B 10-yr. notes at 5.875%

State-owned Land Bank of the Philippines (LandBank) raised P10.5 billion by issuing peso-denominated Tier-2 notes.   Since bids to buy the notes reached more than P12.5 billion, compared to the P6.5-billion original offer, the bank decided to award P10.5 billion.   LandBank president and CEO Gilda Pico noted the strong demand indicated the level of investor confidence in the bank.   Thus, LandBank was able to set the coupon rate at 5.875 percent per a year, down from the initial 6 percent the bank announced in launching its debt notes.   The bank achieved the lowest coupon rate for a Tier-2 transaction, which marks the largest ever peso-denominated issue by a bank in the Philippine market, Pico said.   “We are very pleased with the results of our capital raising exercise. The Tier-2 Notes will further strengthen LandBank’s capital ratios and provide us significant room to continue pursuing our mandate of supporting countryside development,” she said.   The Tier-2 notes will mature in 10 years and three months from the Jan. 27, 2012 issue date, with an option for investors to make a call after the fifth year.   LandBank is paying quarterly interest for the life of the notes, according to the terms of offer.   However, there will be no step-up in the interest rate should the bank decide not to exercise the call option.   The Philippine lender hired Deutsche  Bank  AG-Manila Branch, Hongkong  and  Shanghai  Banking Corporation  Ltd., and  Standard  Chartered Bank as joint lead arrangers and selling agents for the transaction.   Also acting as selling agents were the Multinational Investment Bancorporation and LandBank on a limited basis. — VS, GMA News