The Land Bank of the Philippines yesterday announced the completion of its peso-denominated 10-year and three months Tier 2 notes sale amounting to P10.5 billion, higher than the initial target of P6.5 billion, a government press release said.

Landbank President and chief executive officer Gilda Pico said they received orders amounting to P12.5 billion, thus, the increase in their issuance.

She explained that Landbank was able to get a better price for their Notes citing that the initial price of six percent per annum coupon rate was lowered to 5.875 percent due to strong demand for the notes.

Pico stressed that their latest issuance “achieved the lowest coupon for a Tier 2 transaction and also marks the largest ever public Peso bank issuance in the Philippines.”

“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.

Pico said the Tier 2 Notes will be issued on January 27, 2012 and have a call option after the fifth year.

She also said that this issuance will have no step-up in the interest rate should Landbank decide not to exercise the call option.

The bank mandated Deutsche Bank AG, Manila Branch, The Hongkong and Shanghai Banking Corporation Limited and Standard Chartered Bank as Joint Lead Arrangers and Selling Agents for the transaction while Multinational Investment Bancorporation as tapped as selling agent along with Landbank. *PNA

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