The international law firm Milbank, Tweed, Hadley & McCloy recently advised on two rights offerings in the Philippines for leading universal banks Bank of the Philippine Islands (BPI) and Philippine National Bank (PNB).
Milbank advised J.P. Morgan and Goldman Sachs, as joint international bookrunners and underwriters, on the approximately US$555 million (Php25 billion) rights offering by BPI.
The BPI rights offering consisted of 370,370,370 Common Shares offered at the Offer Price of Php67.50 per Rights Share. The offering was available to all eligible shareholders outside the United States. The rights offering was also made available to BPI’s shareholders in the United States who are qualified institutional buyers by way of a private placement in accordance with Section 4(a)(2) of the United States Securities Act.
The BPI rights offering involved Ayala Corporation, which directly owns 21.84% of BPI’s shareholdings, and its subsidiary, Ayala DBS Holdings Inc., both of which participated in the offer to the extent of their pro-rata shares. The deal marks the largest capital markets transaction in BPI’s history.
BPI Capital Corporation acted as the sole global coordinator and lead manager, sole domestic manager and domestic bookrunner and underwriter.
Milbank also advised PNB in relation to its approximately US$265 million (Php12 billion) rights offering in the Philippines. Credit Suisse and Deutsche Bank served as joint international lead managers and international underwriters and PNB Capital and Investment Corporation served as sole domestic underwriter.
Similar to the BPI offering, PNB’s rights offering was made available to all eligible shareholders outside the United States and to PNB’s shareholders in the United States who are qualified institutional buyers pursuant to a 4(a)(2) private placement.
PNB is a subsidiary of the LT Group, one of the largest conglomerates in the Philippines. The funds raised from the offer will support a capital injection into the PNB-owned Allied Savings Bank as well as help build and refocus PNB’s consumer lending business. The rights issue also strengthens PNB’s capital position under the Basel III capital adequcy standards and will help better PNB’s position to fulfill its medium-term growth objectives and further capitalize on the benefits of its merger with Allied Banking Corporation.
Global Securities Partner James Grandolfo commented, “We are extremely pleased to have been able to assist both BPI and PNB on their recent capital markets transactions. The success of these two deals, especially given the current volatility in emerging markets, is a testament to the strong fundamentals of these two leading Philippine banks and the overall strength of the Philippine economy and banking system.”
These transactions mark the first two international equity transactions out of the Philippines in 2014.
The Milbank team for both transactions was led by partner James Grandolfo. Special counsel Paul Pery supported on the PNB rights offering, while senior associate Kurt Sherwood and associate Zizhen Chen provided support on both transactions.
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