AUB selling P5B notes

REBISCO group-led bank Asia United Bank is raising P5 billion from an offering of long-term debt notes qualifying as tier 2 or supplementary capital.

“By continuously embarking on ways to redefine our value proposition to our clients, we are staying a step ahead in innovation and technology, as well as reaching out to more customers who are starting to reap the benefits of our investment in expanding our network and in product offerings. This is why having a strong capital base is important in supporting our ambition to become one of the top ten leading banks in the Philippines,” AUB president Abraham Co said in a press statement on Wednesday.

The offering of tier 2 notes started on Wednesday and will run until Nov. 16 but the bank reserves the right to shorten the offer period as needed. AUB plans to issue the tier 2 notes in one or more tranches within one year.

AUB’s notes issuance will have a maturity of 10 years from the issue date of each tranche. The bank has the option to redeem any tranche on any interest payment date falling after the fifth anniversary of the tranche’s issue date.

The issue price will be at 100 percent of the face value of the notes. The indicative yield ranges from a low of 5.5 percent to 5.875 percent per annum with the final rate to be announced at the end of the offer period. The minimum investment amount is P500,000, with increments of P50,000 thereafter.

BDO Capital and Investment Corp. and Deutsche Bank AG Manila branch were mandated as joint lead arrangers and joint bookrunners. Another selling agent is Multinational Investment Bancorporation while AUB also acts as a limited selling agent.

The net proceeds are seen to strengthen AUB’s capital adequacy based on the requirements of the Bangko Sentral ng Pilipinas under the Basel 3 framework, which prescribes a complex package of reforms designed to improve the ability of banks to absorb losses. This capital adequacy framework also extends the coverage of financial risks and requires stronger firewalls against periods of stress.

AUB, which is celebrating its 18th year this month with the theme “Redefined at 18,” is among the top 20 banks in the Philippines with an asset size of P131.4 billion as of end-June 30. It has a network of more than 200 branches and 239 automated teller machines nationwide. It has also been one of the most active players in the online banking space as early as 2007.