YUCHENGCO-led Rizal Commercial Banking Corp. has raised $320 million from a fresh offshore bond float priced at the lowest coupon rate for a local bank.
The deal also marked the largest US dollar bond issuance out of the Philippine banking system, RCBC said in a disclosure to the Philippine Stock Exchange on Tuesday.
The 5.25-year bonds were priced to yield 3.45 percent per annum, tighter than the initial guidance of 3.75 percent following what was described as “well-received” roadshow in Singapore and Hong Kong in recent days.
RCBC said it received orders of over $1.3 billion or four times its intended issuance. On Monday, the bank said it was planning to raise only $125 million from this funding deal.
“The interest for RCBC’s strong credit, which has shown robust and sustained profitability and loan and asset growth on the backdrop of a dynamic Philippine economic story reflected in the early positive momentum for the transaction,” the disclosure said.
About 150 investors participated in this transaction, of whom 87 percent are foreign investors based outside the United States. This allowed RCBC to diversify its investor base.
The RCBC bonds will mature on Feb. 2, 2021. They are in denominations of $125,000 and increments of $1,000 thereafter. They have been rated Baa3 (entry-level investment grade) by Moody’s Investor Service and BB (two notches below investment grade) by Fitch Ratings. They will be listed on the Singapore Stock Exchange.
BofA Merrill Lynch, HSBC and JP Morgan acted as joint bookrunners for the transaction.
Proceeds from the issuance will be used for “refinancing operations and general corporate purposes,” based on an earlier disclosure. Specifically, RCBC will use fresh funds to participate in infrastructure deals.
The securities will be offered to foreign investors outside of the United States.
These bonds were drawn from RCBC’s $1 billion euro medium term note program which was established in September 2011. This program gives it flexibility to access international capital markets through a variety of currencies and financial instruments.