BDO prices rights offer at P48.60

MANILA, Philippines - BDO Unibank Inc. (BDO) has priced its stock rights offering at P48.60 each for approximately 895.2 million common shares to raise around P43.5 billion in fresh capital.

In a statement, BDO said the one-for-three rights offer means that shareholders are entitled to buy one additional share at said price for every three shares they currently own.

The ex-rights date has been set on June 8 while record date is on June 14. The rights offer will commence on June 18 and ends on June 27.

BDO said the offer price was based on the 15-day volume-weighted average price of its common shares listed at the Philippine Stock Exchange (PSE) at a discount of 24.9 percent.

The fully underwritten transaction will raise around $1 billion in additional capital for the bank using Monday’s weighted average foreign exchange rate of P43.479 per US dollar.

The transaction was arranged by Citigroup, Deutsche Bank and JP Morgan as joint international lead managers and underwriters; United Overseas Bank Ltd. as international co-lead manager and co-lead underwriter; and BDO Capital & Investment Corp. as issue manager and domestic underwriter.

BDO chairperson Teresita T. Sy said the additional capital would be used to support the bank’s medium-term growth objectives.

A portion will likewise be set aside in anticipation of the stringent Basel III capital guidelines of the Bangko Sentral ng Pilipinas (BSP)

Under the Basel III capital framework, the BSP will be raising the capital adequacy ratio (CAR) from the present 10 percent to 12.5 percent, as well as doubling of the Tier 1 ratio from five percent to 10 percent by 2014.

“The bank is optimistic about the outlook on the Philippine economy and hopes to continue with its faster-than-industry loan growth, driven by a strong consumer sector and opportunities in the SME, middle market and large corporate segments,” Sy added.