RCBC debt paper gets BSP nod

MANILA, Philippines - The P4-billion subordinated debt offer of the Rizal Commercial Banking Corp. (RCBC) worth P4 billion has received the nod from the Bangko Sentral ng Pilipinas (BSP). The funds raised from the debt offer will be used “to grow its core business by further expanding its branch network and becoming a ‘one-stop’ financial center.”

The 10-year unsecured subordinated notes will carry a call option after the fifth year, allowing the issuer to redeem subordinated notes in accordance with the regulations on subordinated debt.

The BSP allows local banks to issue Tier 2 or subordinated debt notes, also known as supplementary capital, to comply with capital adequacy requirements.

In a report, the Yuchengco-led commercial bank expanded its customer reach via traditional bricks and mortar and electronic channels, including the Internet through RCBC Access One.

“We planned that lower Tier 2 issue just in case loan portfolios deteriorate this year,” Lorenzo V. Tan, RCBC president told The STAR in an earlier interview.

Tan said that the bank’s capital adequacy ratio (CAR) stood at 18 percent at the end of September 2008. “With the issue, our CAR will increase to at least 19 percent,” he added.

The Bangko Sentral ng Pilipinas (BSP) requires a minimum CAR 10 percent for all banks, while the Bank for International Settlements (BIS) wants an average eight percent for all banks globally. – TPT