LandBank Eyes Issuing P50 Billion in Bonds This Year, Its Highest in History
The Land Bank of the Philippines (LandBank) is looking at entering the debt market again to raise as much as P50 billion, banking on the expected drop in interest rates in the last quarter of the year. If successful, this would be the largest bond issuance by the government-run lender.
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“We’re doing all the spade work and documentation to get there,” LandBank president and chief executive officer Lynette Ortiz said in an interview. “We want P25 billion to P50 billion.”
Proceeds from the bond sale will go to the bank's various loan programs, with domestic creditors as the priority. But selling its debt securities offshore, or outside the country, is not off the table, according to LandBank.
The state-run lender raised a total of P5 billion when it last entered the debt market in 2021. Late this year may be the right time for LandBank to issue bonds again, as the Bangko Sentral ng Pilipinas (BSP) is projected to ease policy rates as early as August. Until last week, the Monetary Board had kept rates unchanged at 6.5 percent amid continuing inflation risks.
“Timing is everything. When you go to the market, you don’t want to be subject to the vagaries of up and down. That would not be proper balance sheet management,” Ortiz said.
Aside from selling record debt securities, LandBank is pushing for an increase in its capital to P1 trillion from over P200 billion. This will allow the bank to penetrate the stock market, and not just the capital market. The proposed law for this, however, is still pending in the Senate, so LandBank says it can only hope it would be enacted into law within the year.
“We need to go through the nuts and bolts of how that’s all going to work out,” said Ortiz. “We’re hoping we can do [the bond sale] this year and then the equity market, perhaps next year.”
