BDO raises P5 B in capital buildup

Banco de Oro Unibank Inc. (BDO) has completed the issuance of 500-million preferred shares, raising P5 billion for its ongoing expansion and Tier 1 capital build-up.

“The shares were issued through private placement to not more than 19 subscribers and to qualified buyers,” BDO said in a disclosure to the Philippine Stock Exchange.

BDO corporate information officer Elmer B. Serrano earlier said the indicative fixed dividend rate of the preferred share issue is 6.5 percent per annum.

Other features of the preferred share offer are: the shares are convertible into common shares three years from issue date; the shares are non-cumulative and non-participating; they qualify as Tier 1 capital; they are considered voting shares; and are perpetual in nature.

“The bank aims to undertake and complete this offer or its series A preferred shares from September to November 2008,” Serrano added.

Earlier this year, BDO issued P10-billion in unsecured subordinated debt notes.

The issue, which is also eligible a Lower Tier 2 capital, carried a coupon rate of 8.5 percent per annum and issued at 100 percent of face value. The issue was priced tightly against the five-year government bond yield.

The funds raised for the issuance of preferred shares and the P10-billion notes will be used to support BDO’s expansion plans. It will also increase and strengthen BDO’s capital base “ensuring that it has available capital for its growth plans in the coming years.”

BDO is the country’s second largest bank with assets of P676.7 billion. It has the biggest trust banking operations with assets under management of P294.2 billion and is among the market leaders in its core business lines, with a nationwide network of 657 branches and close to 1,200 ATMs.