STI acquires CAP shares in Bank of Commerce

Systems Technology Institute (STI) which is majority owned by businessman Eusebio Tanco has become one of the shareholders of Bank of Commerce. The deal involves the shares previously held by holdings of the Trust Fund of College Assurance Plans, Inc. (CAP) in Bancommerce. STI, through its own trust fund, acquired common and preferred shares in Bancommerce.

The agreement entailed the acquisition by CAP of STI’s "Gift of Knowledge Certificates" which assures a "win-win" for both institutions. Under the terms of the agreement, CAP subscribed to STI’s bond issues in exchange for its preferred and common shareholdings in the bank.

The certificates effectively fixed the future cost of education at current prices. It enabled CAP to manage any future hikes in tuition fees for its scholars, which is estimated at about eight percent annually.

One of the bond’s features is that the tuition fees shall be pegged at today’s prices for the next six years or throughout the life of the bond.

This deal assures the scholars of CAP with an alternative institution of higher learning providing quality education when they are ready to go to college despite any price movements in the cost of education. On the part of STI, it assures them of another source of enrollees each year from the CAP scholars.

As the deal involves the shares of Bancommerce, implementation of the agreement takes effect upon receipt of the final approval from the Monetary Board and the PDIC.