AUB selling P5B notes to boost capital

The Rebisco group’s banking arm Asia United Bank (AUB) is raising P5 billion by offering debt notes that qualify as tier 2 or supplementary capital.

The offering of tier 2 notes started on Wednesday and will run until Nov. 16. The bank, however, reserves the right to shorten the offer period as needed.

AUB is planning to issue the tier 2 notes in several tranches in one year.

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.

“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,” AUB president Abraham Co said in a press statement on Wednesday.

“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,” Co said.

AUB’s notes will have a maturity of 10 years from the issue date of each tranche.

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 up to 5.875 percent per annum and 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 book runners. Another selling agent is Multinational Investment Bancorporation while AUB also acts as a limited selling agent.

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.

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 online banking as early as 2007. Doris Dumlao-Abadilla