BDO sets rights offer at P83.75 per share

The country’s leading lender BDO Unibank has given shareholders the right to buy new shares at a price of P83.75 per rights share as part of its P60-billion capital build-up program.

In a disclosure to the Philippine Stock Exchange on Wednesday, BDO announced the final terms for its stock rights offering of up to 716.4 million common shares.

Each eligible stockholder is entitled to subscribe to one common share for every 5.095 common shares held as of record date as of record date January 10.

At the offer price of P83.75, shareholders will be entitled to buy new shares at a 23.4 percent discount to market price based on the 15- day volume-weighted average price of BDO common shares.

The stock rights offer will commence at 9:00 a.m. on Jan. 16 and end at 12:00 p.m. on Jan. 24 this year.

“The fresh capital will support the bank’s medium-term growth objectives amid the country’s favorable macroeconomic prospects and provide a comfortable buffer over higher capital requirements with the forthcoming imposition of the Domestic Systemically Important Bank (DSIB) surcharge,” the bank said.

The Bangko Sentral ng Pilipinas has classified banks depending on the extent of their systemic importance using pre-defined indicators for size, interconnectedness, substitutability and market reliance as a financial market infrastructure as well as complexity. The higher bar for DSIBs like BDO in terms of capital requirement and supervisory expectations is intended to strengthen the financial system by lowering the probability of systemic bank failures.

BDO has appointed Credit Suisse, UBS and BDO Capital as joint global coordinators and bookrunners, with Citigroup, Goldman Sachs and HSBC as joint bookrunners. BDO Capital will serve as issue manager and domestic underwriter.

Sy family-led conglomerate SM Investments Corp. (SMIC) – BDO’s controlling and majority shareholder – has expressed its full support for the bank’s expansion plans and the proposed rights offer.

“SMIC commits to subscribe to its proportionate share and is willing to underwrite any shares not taken up by minority shareholders,” the disclosure said.