RCBC completes issuance of debt notes worth P3B

MANILA, Philippines–Rizal Commercial Banking Corp. has completed ahead of schedule a P3-billion fund-raising exercise through the issuance of debt notes qualifying as tier 2, or supplementary capital.

In a disclosure to the Philippine Stock Exchange on Thursday, RCBC said it had already closed the scheduled offer period for its tier 2 notes due 2024.

“As a result of the overwhelming demand for our tier 2 notes, we were able to close our offer period early. The orders received after just two days have already exceeded our P3 billion offer size. We are grateful for the support and confidence from our clients, who have helped make this offering a success,” RCBC senior vice president Carlos Mercado said.

On Tuesday, the bank reopened its 5.375-percent per annum tier 2 notes due 2024, thereby using up its leeway given by the Bangko Sentral ng Pilipinas to raise as much as P10 billion from the issuance of this instrument. The offering was originally scheduled to run until Monday. The reopened tier 2 notes will be issued on Sept. 5, 2014.

Deutsche Bank AG, Manila Branch acted as sole arranger and bookrunner and selling agent for this issuance, while Multinational Investment Bancorporation was additional selling agent. RCBC acted as limited selling agent. The reopened tier 2 notes will be consolidated with the P7-billion 5.375 percent unsecured subordinated notes due 2024 issued by RCBC last June 27.

Likewise, in line with RCBC’s capital-raising initiatives, RCBC is mulling over plans to take in Taiwanese financial group Cathay Financial Holding Corp. as a minority investor.

Asked by the BSP to clarify wire reports from Taiwan that Cathay Financial was keen on buying up to 30 percent of RCBC, the bank confirmed “ongoing discussions for a private placement” but noted these were not yet final.

RCBC has been beefing up capital to finance its expansion plans amid the implementation of the more stringent Basel 3 capital adequacy ratio (CAR) framework. This framework introduced a complex package of reforms designed to improve a bank’s ability to absorb losses.

As of end-June, RCBC of the Yuchengco group was the sixth-largest private commercial bank in the Philippines in terms of assets, based on published statements of financial condition. At the time, the bank had a market capitalization of P67.6 billion and Basel 3-compliant common equity tier 1 ratio and capital adequacy ratio of 10.9 percent and 13.8 percent to risk assets, respectively.–Doris C. Dumlao