RCBC recognized for ‘moderate capability’ to service $1-B five-year notes

MANILA, Philippines — The plan of the Rizal Commercial Banking Corp. (RCBC) to issue bonds in the international capital market has been evaluated by key ratings firms as the bank expects to raise funds to support its lending and other banking businesses.

Fitch Ratings gave a rating of BB-, which is three notches below investment grade, while Moody’s Investors Service assigned a rating of Ba2, which is two notches below investment grade, to the $1-billion, five-year notes to be issued by RCBC.

“The Ba2 rating on RCBC’s foreign currency senior unsecured bonds recognizes the bank’s moderate capability to service its debt obligations, as reflected in its financial profile,” Moody’s said in a statement.

The securities to be issued by RCBC, under the bank’s $1-billion Euro Medium-Term Note Programme, are aimed at supporting more activities of the bank starting 2012.

Moody’s said the outlook on its rating to the securities of RCBC was “stable,” which indicated that the rating would likely stay the same within the short term.

RCBC, which is majority owned by the Yuchengco family, reported that its total assets as of the end of September 2011 were at P312 billion.

Its net income in the first three quarters of 2011 stood at P4.08 Billion, rising by 11.4 percent from P3.66 billion in the same period in 2010.

Jose Emmanuel Hilado, RCBC treasurer, was quoted as saying earlier that tapping the international credit market early in the year would be deemed prudent by the bank given the current low interest-rate environment.

“The bank continued to build its financial strength following a deliberate strategy of prudent balance sheet management,” RCBC said in an earlier statement posted in its website.

The bank also reported a comfortable level of exposure to bad debts, as its non-performing loans ratio stood at 2.13 percent as of end-September, better than the 5.46 percent as of the same period of the previous year. The NPL ratio of RCBC was a bit lower than the industry average of about 2.5 percent.