RCBC raises $300M from notes issue

Bracing for a rapid growth in lending activity in line with the country’s expanding economy, Yuchengco-led Rizal Commercial Banking Corp. (RCBC) raised $300 million from the sale of five-year debt notes and is raising another $300 million (P15 billion) from the sale of new shares to existing investors by June.

RCBC president Gil Buenaventura said the proposed stock rights offering would complement the bond offering. “All this fundraising is meant to support the anticipated double-digit growth in loans,” he said.

For the first time since 2015, RCBC tapped the overseas bond market with the issuance of five-year bonds that were priced to yield 4.125 percent a year.

“This is clearly a reflection of how investors feel about the positive fundamentals of RCBC going forward,” RCBC head of treasury Chester Luy said in a briefing yesterday.

The order book was strongly supported by a broad base of accounts, including asset managers, insurance companies, sovereign wealth funds, banks and private wealth managers. It was oversubscribed by 1.8 times the base offer.

About 97 percent of the issuance was taken up by investors in the Philippines and Asia.

“Our market is really Asia. Clearly, they know the RCBC story,” Luy said.

The notes were in denominations of $200,000 and increments of $1,000 thereafter. These will mature on March 16, 2023.

RCBC will list the notes on the Singapore Exchange Securities Trading Ltd., similar to its two outstanding US dollar-denominated bonds maturing 2020 and 2021.

Cathay United Bank, Citigroup, Deutsche Bank, Standard Chartered Bank, UBS and Wells Fargo Securities acted as joint lead managers and joint bookrunners.

“The good thing about RCBC is we’re very diversified as far as funding source is concerned. We’re not just focused on any single source of funding like senior notes and that’s good for a bank,” Luy said.

The proposed stock rights offering in June, on the other hand, will add around 300 basis points to the bank’s core or tier 1 capital as a ratio of risk assets. —DORIS DUMLAO-ABADILLA