BDO plans P5-B preferred share offering
By Elizabeth Sanchez-Lacson
Philippine Daily Inquirer
First Posted 01:19:00 09/02/2008
Filed Under: Financing, Stock Offerings
Banco de Oro Unibank, the country’s second-biggest bank in assets, plans to issue P5 billion worth of preferred shares to raise capital and support its expansion.
In a disclosure to the stock exchange, BDO said its board had approved the issuance of up to 500 million series A preferred shares at a par value of P10 a share.
The preferred shares will be perpetual, voting and convertible into common shares in three years from its issue date. The shares will also be non-cumulative, nonparticipating, does not have preemptive rights (or the right granting shareholders the first crack to buy a new issue of stock) and could qualify as Tier 1 capital.
Tier 1 capital is considered a core measure of a bank’s financial strength from a regulator’s point of view. It consists of shareholders’ equity but may also include preferred stock that is non-redeemable and non-cumulative and retained earnings.
The proposed dividend rate for the preferred shares was set at an indicative fixed rate of 6.5 percent per year.
The bank will hold the offering between September and November.
In another development, the bank also received the approval of the Securities and Exchange Commission for the merger of its two wholly owned insurance brokerage units—BDO Insurance Brokers Inc. and EBC Insurance Brokerage Inc. BDO Insurance will be the surviving entity. All assets and liabilities of EBC Insurance Brokerage will be owned and assumed by BDO Insurance Brokers.
The merger of the insurance broker units is in line with the bank’s policy of streamlining its organization and operations, Banco de Oro corporate information officer Elmer Serrano said.
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