PNB plans P12-B rights offering, doubles euro note plan

Tycoon Lucio Tan-led Philippine National Bank (PNB) is firming up plans to raise fresh funds to support asset growth.

In a stock exchange filing on Friday, PNB said a P12-billion rights offering will start on June 26 even as it announced that it had doubled its euro medium term note (EMTN) program to $2 billion.

PNB said the rights offering would involve the listing of up to 300 million common shares. This will widen its common equity tier 1—a key indicator of a bank’s financial strength. The fresh funds will allow PNB “to sustain its asset growth.”

According to the filing, the rights offer will run from June 26 to July 5 this year. The offer price and entitlement ratios have yet to be determined, PNB added.

The bank’s consolidated risk-based capital adequacy ratio (CAR) exceeds the minimum regulatory requirement of 10 percent to date. The bank wants more leeway to expand its capital base to fund future expansion.

The lender’s euro medium-term note program, meanwhile, was established in 2018. It is meant to be a source of steady funding via debt issuances that PNB can tap for its financing needs.

These notes allow the issuer to register with the Securities and Exchange Commission only once, using the shelf registration window, instead of doing the paperwork every time for different maturities.

PNB announced last week that it was planning to raise at least $300 million from the debt program. The transaction is expected to be launched within the third quarter of 2019. —MIGUEL R. CAMUS

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