BDO eyes fixed-rate dollar notes issue for additional capital

MANILA, Philippines - Banco De Oro Unibank Inc. (BDO) is planning to issue dollar-denominated fixed rate senior notes in the domestic and international markets to raise additional capital for its expansion and well as other banking and lending activities.

In a report, BDO said the senior notes represent direct, unsecured obligations which will mark its return to the international debt market.

“The plan is for the senior notes to be sold through a bookbuilding process to both international and local investors under the Reg S format. The transaction is expected to close within October 2010,” it said.

Citi and UBS will act as joint lead managers and bookrunners while BDO Capital & Investment Corp. as co-manager.

Earlier this year, the universal bank of the SM Group of Companies raised $250 million to meet its medium-term growth targets, as well as build a buffer for the new Basel III capital requirements.

Of the total amount, $150 million came from the sale of shares to the International Finance Corp. (IFC) and the IFC Capitalization Fund, a joint effort of the Japan International Cooperation Agency (JICA) and the IFC.

The other $100 million came from foreign institutional investors based in Asia.

The $250 million infusion represents about 12.5 percent of existing share capital and boosted the bank’s capital adequacy ratio (CAR) from 12.4 percent to 14.1 percent.

BDO will be acquiring troubled Export and Industry Bank (EIB) which has liabilities worth P52 billion.

BDO president and chief executive officer Nestor V. Tan said the bank’s acquisition appetite has not been satisfied despite the eventual absorption of EIB.