RCBC issues P3-B notes for Tier 2 capital

MANILA, Philippines - Rizal Commercial Banking Corp. (RCBC) is offering P3-billion worth of unsecured subordinated notes eligible for Tier 2 capital at an interest rate of 5.375 percent, with the offer period from Aug. 26 to Sept. 1 this year.

The P3-billion notes is part of the P10-billion notes package which was re-opened yesterday under the approval of the Bangko Sentral ng Pilipinas (BSP).

“Once issued, the reopened Tier 2 notes will constitute a further issuance of, fungible, consolidated, form a single series, and to the extent provided in the terms, rank pari passu in all respects with the existing P7-billion, 5.375-percent unsecured subordinated notes due 2024 issued by RCBC on June 27, 2014,” the bank said in a report.

The notes will mature in September 2024, while the issuer would have the option to redeem just a year before maturity.

Deutsche Bank AG Manila branch is the sole arranger and bookrunner and selling agent for the entire issue. Multinational Investment Bancorporation acts as additional selling agent while RCBC will be a limited selling agent.

Increments for the notes will be an initial P500,000 and P100,000 for additional placements.

RCBC said the funds raised from the issue woud be used to strengthen its capital base as well as its capital adequacy ratio (CAR). Asset growth is also part of the capital expenditures from funds raised from the notes issue.

The Yuchengco-led bank has a Basel III-compliant common equity Tier 1 ratio of 10.9 percent and CAR at 13.8 percent.

In the first semester of 2014, the Country’s sixth largest Commercial bank reported a 36-percent drop in net earnings, or from P3.18 billion in the first semester of 2013 to P2.02 billion, due to lower trading gains.