RCBC to launch 2nd offer of negotiable dollar time deposits

MANILA, Philippines - Encouraged by the positive response towards its initial dollar-denominated time deposit, the Rizal Commercial Banking Corp. (RCBC) will launch a second offering of dollar-denominated Negotiable Certificates of Time Deposits (NCTDs), bank officials said.

The offer period will run from Oct. 8 to 15, with an option to extend. The bank officials failed to give an exact amount for the offer although they hinted that it would not be below $50 million worth of NCTDs. Last month, RCBC issued NCTDs worth $85 million (approximately P4 billion).

The offering will be separate from last month’s offer but will carry a similar fixed annual interest rate of 3.75 percent, payable quarterly until they mature three years from issue date or on October 2012. 

Interest on the NCTDs will be subject to 7.5-percent withholding tax.

The NCTDs are senior deposit obligations of the bank and will be offered in minimum denominations of $5,000 and in increments of $1,000.

The dollar-denominated time deposit offer is negotiable and transferable in the secondary market via a market maker and will be covered by the Philippine Deposit Insurance Corp. “up to the specified limits.”

RCBC is the first bank in the Philippine market to issue dollar-denominated medium-term deposits in negotiable format and similar to other recent public peso-denominated Long Term Negotiable Certificates of Deposits (LTNCD) and Lower Tier 2 Notes offerings.

Deutsche Bank AG, Manila branch remains the lead arranger for the issue.

Last May, RCBC raised P4 billion through a Lower Tier 2 unsecured subordinated notes. Lower Tier 2 capital is supplementary capital structured as interest-bearing notes with a limited tenor of at least five years. The notes are subordinated to the claims of the bank’s depositors and senior creditors but senior to its equity shareholders.

The Lower Tier 2 offer will boost and strengthen the bank’s capital base, allowing RCBC to capture growth opportunities including acquisitions, pay off maturing debts, and provide cover in case its case loan portfolio deteriorate this year.