May 3, 2013 / 1:05 AM / 5 years ago

UPDATE 1-Manila's Asia United prices $204 mln IPO, offer oversubscribed

MANILA, May 3 (Reuters) - Philippine lender Asia United Bank (AUB) has priced its $204 million initial public offer at the midpoint of an indicative range to ensure after-market support, although the issue was oversubscribed after the Philippines bagged its second investment grade rating.

The pricing comes as the Philippines stock market has surged 22 percent this year to become Southeast Asia’s best performing bourse on expectations of continued strong domestic growth. Last year, the Philippines was Asia’s fastest growing economy after China .

The offer, which runs from May 7-14, will raise 8.36 billion pesos at a final price of 95 pesos a share, said UBS, one of the bank’s underwriters.

AUB had announced an indicative price range of 80 pesos to 110 pesos ahead of the roadshow. Its offer consists of 80 million primary shares and an over-allotment option of up to 8 million shares.

The international order book for the offer was five times oversubscribed with an estimated 90 investors, three-fourths of which came from Asia and the rest from Europe.

“The order book was covered throughout the price range but the issuer wanted to ensure after-market support,” Lauro Baja, UBS managing director in Manila, said in a text message to reporters, adding the pricing came after a roadshow of only three-and-a-half days.

On Thursday, Standard & Poor’s raised the Southeast Asian country’s debt rating to investment grade, the second debt agency to do so after a similar move by Fitch Ratings in late March, sealing the country’s position as the region’s newest investment destination.

Asia United Bank’s IPO is only the second by a Philippine company this year, after Philippine Business Bank’s 3.2 billion peso listing in February.

But with huge follow-on offers by listed firms, most recently Melco Crown (Philippines) Resorts Corp’s $377 million share issue and conglomerate LT Group Inc’s record $912 million follow-on share offer last month, the country has eclipsed total share sales from IPOs and follow-on deals for the whole of 2012.

After the share issue of Melco Philippines, a unit of Macau-based Melco Crown Entertainment, the total value of share sales to the public in just the first four months of the year hit $2.7 billion, according to Thomson Reuters data.

That exceeds the country’s $2.53-billion record sales from IPOs and follow-on deals for all of 2012.

UBS AG is the sole global coordinator for AUB’s offer. It is also bookrunner and lead manager together with Credit Suisse.

BDO Capital and Investment Corp and First Metro Investment Corp have been tapped as domestic underwriters.

Asia United Bank, owned by unlisted Philippine snack food manufacturer and exporter Republic Biscuit Corp, will use the offer proceeds to finance expansion plans.

It aims to list on the Philippine Stock Exchange on May 17. ($1 = 41.0650 Philippine pesos) (Reporting by Rosemarie Francisco and Erik dela Cruz; Editing by Edwina Gibbs)

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