RCBC plans to issue $1B worth of debt paper
LOOKING FORWARD The RCBC headquarters in Makati City’s financial hub. The bank plans to issue some $1 billion offshore debt paper for expansion when global market conditions become more favorable. PHOTO FROM RCBC.COM
MANILA, Philippines—Yuchengco-led Rizal Commercial Banking Corp. is planning to issue as much as $1 billion worth of offshore debt paper to boost funds for expansion when global market conditions turn more favorable.
RCBC told the Philippine Stock Exchange on Monday that its board had approved the establishment of a euro medium term note (EMTN) program with a tenor of five to seven years.
Euro notes refer to US dollar-denominated securities marketed and issued outside the United States.
RCBC treasurer Jose Emmanuel Hilado said in an interview that this was just to prepare the documentation requirements for the bank to be able to quickly launch a euro note offering if and when overseas conditions improve.
Hilado added that the overseas issuance was aimed at taking advantage of low interest rates in the offshore debt market. Such offering would be “opportunistic,” he said.
The last time RCBC braved the offshore debt market was in early 2010 when it issued $250 million in five-year senior notes to strengthen its long-term liquidity position.
RCBC had a market capitalization of P31 billion at the stock market as of Monday’s closing price of P29.45 per share.
The bank recently consummated a deal to sell a 15-percent stake to a unit of global private equity firm CVC Capital Partners, completing its medium-term capital build-up program ahead of stringent global capital adequacy standards.
Through Hexagon Investments, an Amsterdam-based company, the CVC Capital Partners group invested P4.96 billion in the bank. This brought up RCBC’s capital adequacy ratio and core tier 1 ratio to 19.89 percent and 14.9 percent, respectively.
With the entry of CVC and an earlier similar deal with International Finance Corp., the Yuchengco group pared down its stake in RCBC to 57 percent from about 75 percent.
