BSP okays RCBC Tier 2 notes issue

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has given its go-signal for Yuchengco-owned Rizal Commercial Banking Corp. (RCBC) to proceed with its planned issuance of P10 billion Tier 2 notes.

RCBC disclosed to the Philippine Stock Exchange that the BSP approval would allow them to proceed with the P10-billion Basel III-compliant Tier 2 unsecured subordinated notes.

According to RCBC, it plans to commence the offer in the coming weeks, subject to market conditions and compliance with regulatory requirements.

RCBC said its plan to issue Basel III-compliant notes would further improve its capital base.

RCBC said it plans to issue of the 10-year debt notes with a call option to redeem on the fifth year.

The bank, however, said the issuance would also hinge on prevailing market conditions.

“The Tier 2 notes issuance is part of the bank’s thrust to strengthen its capital adequacy ratio in accordance with Basel III capital guidelines of the BSP and to support the bank’s continued growth,” it said.

The main banking unit of the Yuchengco family earlier approved the early redemption of some P4 billion unsecured subordinated notes qualified as Lower Tier 2 capital.

The notes will carry a rate of 7.75 percent with original maturity date of May 15, 2019 and callable on May 15, 2014.

RCBC is the fifth-largest bank in the Philippines in terms of assets, with a market share of 5.2 percent as measured by loans and 4.3 percent by deposits.