RCBC raises P4B from debt issue

BWorld/Monday, May 11, 2009 | MANILA, PHILIPPINES

RIZAL COMMERCIAL Banking Corp. (RCBC) said it had raised P4 billion from a Tier 2 notes issue.

RCBC said at the weekend it had closed the order book ahead of the May 12 deadline after raising the amount it needed on Friday.

"The bank received applications of more than the planned volume of P4 billion. The P4-billion order book was filled within just the first seven days of the planned two-week offer period," RCBC said in a statement.

The bank was authorized by the Bangko Sentral ng Pilipinas (BSP) to raise as much as P4 billion in unsecured subordinated debt notes qualifying as lower Tier 2 capital.

Tier 2 capital is supplementary capital that ranks behind the claims of depositors in the event of insolvency.

Aside from RCBC, Banco de Oro Unibank, Inc., the country’s largest, raised P3 billion in Tier 2 debt in March. BDO was followed by the Metropolitan Bank & Trust, the second largest, which raised P4.5 billion in Tier 2 debt the following month.

RCBC’s lower Tier 2 debt offer has a 10-year maturity, with a call option to allow it redeem the notes at 100% of the principal plus accrued and unpaid interest by the fifth year, subject to BSP approval.

The notes were priced at 7.75% per annum with quarterly interest payments. The issue date has been set on May 15.

The proceeds of the debt issue are intended to strengthen the bank’s capital base and expand its branch network.

Standard Chartered Bank was the sole arranger, bookrunner and market-maker for the Tier 2 notes.

RCBC is among the 10 largest banks in the country with consolidated resources amounting to P267.2 billion as of the first quarter. It reported a 33% drop in net income last year to P2.15 billion from P3.2 billion in 2007 amid tough economic conditions. — Reuters and Gerard S. dela Peña