RCBC to issue $ debt notes

MANILA, Philippines - The Rizal Commercial Banking Corp. (RCBC) will issue an unsecured, senior US dollar debt notes with a five-year and one-day maturity.

Proceeds of the debt notes would be used for “general banking and re-lending purposes”, according to RCBC.

Standard Chartered Bank has been tapped as lead manager for the issue, while Punongbayan & Araullo will act as auditors.

However, no specific date was given for the debt notes issuance or the exact amount of the planned borrowing.

RCBC president and chief executive officer Lorenzo V. Tan said that the debt notes would help lengthen the maturity profile of the bank’s dollar profile.

 “It is, likewise, our preparation for Basel III requirements on liquidity risk management,” Tan added.

Meanwhile, RCBC senior vice president Raul B. Tan said that the bank has not yet set a specific amount for the debt notes to avoid the market getting fixated or limited.

In 2010, RCBC issued a $250-million senior debt issue, which got a stable rating from rating agencies.

While refusing to reveal an exact figure, bank officials said that this year’s debt notes would not veer too far from the 2010 note.

Tan explained that the dollar debt notes were part of the bank’s $1-billion Euro Medium-Term Note (EMTN) program launched last year. It allows the bank flexibility in addressing the demand of its client base for foreign currency.

The program runs from five to seven years, depending on market demand.

“It is also open to private placement where there is a demand,” Tan added.

The program gives RCBC flexibility in addressing maturing foreign currency loans, as well as for general provisioning for probable losses.

Last September, RCBC launched a multicurrency medium term note program.

The debt issue has a maturity period of five years, and will be listed at the Singapore Stock Exchange.

RCBC also introduced yuan-denominated savings accounts in its branches as the bank’s business with mainland China has been expanding.

Aside from the traditional Chinese-dominated areas of Binondo, Cebu and Davao, RCBC is mulling branches in Northern Luzon – especially Baguio, where Chinese nationals and other clients may need a safe haven in which to park their yuan holdings.

Bank officials said that the yuan is strengthening, and offers a lot of opportunities as Filipino-Chinese traders, entrepreneurs and other migrants continue to expand relations with mainland China.