RCBC cuts short offer period for P5-billion issue due to strong demand

MANILA, Philippines - Rizal Commercial Banking Corp. (RCBC) has cut short the offer period for its P5-billion long-term negotiable certificates of time deposit (LTNCD) due to overwhelming demand from investors.

The LTNCDs were offered in two series of coupon-bearing and zero-coupon certificates, which are deposit obligations with a maturity of five and a half years, issued on May 5, 2010.

The issue marked the first time in the Philippines that coupon-bearing and zero coupon LTNCDs were offered simultaneously.

The public offer, which started last April 15, was scheduled to close after 14 days but due to the overwhelming positive reception of the market, the closing was moved back yesterday.

“We decided to end the offer period a week earlier because of the overwhelming demand from our depositors and various investors. This LTNCD issuance serves as proof of investor confidence in RCBC,” Lorenzo V. Tan, RCBC president said.

The coupon-bearing LTNCDs carry a coupon rate of 6.5 percent per annum and will be issued at 100 perent of face value. The zero-coupon LTNCDs carry a yield-to-maturity of 6.75 percent per annum and will be issued at 69.20 percent of face value.

Tan said the funds raised from the long-term issue will serve to expand RCBC’s long-term deposit base. Proceeds from the transaction will be used to support RCBC’s long-term asset growth.

Hongkong and Shanghai Banking Corp. Ltd. (HSBC) was the sole lead arranger for the offering. Selling agents include BDO Capital & Investment Corp., HSBC, Multinational Investment Bancorporation and RCBC.

Last year, RCBC also issued $85 million (approximately P4 billion) worth of negotiable certificates of time deposit (NCTDs).

RCBC is the first bank in the Philippines to issue dollar-denominated medium-term deposits in negotiable format and similar to other recent public peso-denominated LTNCD and Lower Tier 2 notes offerings.

Dollar-denominated NCTDs are senior deposit obligations, which carried a fixed annual interest rate of 3.75 percent, payable quarterly until maturity in 2012. The NCTDs were issued at par.

The NCTDs are negotiable and transferable in the secondary market through a market maker, and are covered by the Philippine Deposit Insurance Corp. (PDIC).