RCBC raises $250 million from unsubscribed notes

MANILA, Philippines - Yuchengco-owned Rizal Commercial Banking Corp. (RCBC) sucessfully raised $250 million from the issuance of senior unsecured notes as bids reached up to $1.1 billion, the issue underwriters said.

Citibank and Standard Chartered, the lead arrangers of the first dollar-denominated issue by a domestic commercial bank this year, said the swamp of offers forced them to hike the issue size from the original $150 million target.

The notes, which carry a coupon rate of 6.25 percent, would be used to retire RCBC’s $150-million debt maturing this month. The remaining amount would be used to fund its lending portfolio.

FinanceAsia, a leading finance and banking publication in the region, said 40 percent of the issue was gobbled up by domestic players while roughly 50 percent went to the Asian market. European investors accounted for the balance.

The report further indicated that the Philippine corporate issue was well received in its roadshow in Singapore and Hong Kong.

“A banker on the deal attributed the interest to a scarcity value for Philippine issues, due to limited supply of new private sector issuance over the past year. Also, it has been four years since RCBC last came to the international market. It’s last deal was a $100 million tier-1 security in 2006,” it added.

The bank also raised $85 million (approximately P4 billion) worth of negotiable certificates of time deposit (NCTD) last year. The offer has a three-year tenor, an interest rate “depending on market conditions,” and interest periods on a quarterly basis.

It likewise 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.