Investors swarm P5-B AUB fundraising

MANILA, Philippines – Various retail and institutional investors swarmed the note issuance of publicly-listed Asia United Bank (AUB) to raise an additional P5 billion to beef up the bank’s capital base.

The banking arm of Republic Biscuit Corp. (Rebisco) informed the Philippine Stock Exchange (PSE) it has terminated the offer period Friday instead of the original schedule of Nov. 16.

“Oversubscription from various retail and institutional investors prompted AUB to cut short the offer period of its unsecured subordinated Tier 2 notes qualifying as Basel 3-compliant capital,” AUB told the PSE.

The bank said the notes were priced near the low end of the initial pricing range at 5.625 per annum.

The indicative yield was earlier set between 5.5 and 5.875 percent. The notes would be issued on Nov. 25 and will have a maturity of 10 years with a call option exercisable after five years and three months.

BDO Capital and Investment Corp. and Deutsche Bank AG Manila Branch served as joint lead arrangers and joint bookrunners while Multinational Investment Bancorporation served as selling agent.

AUB president Abraham Co earlier said proceeds of the fund raising activity would be used to beef up its capital base as well as capital adequacy ratio in compliance with the requirements of the Bangko Sentral ng Pilipinas (BSP).

“Having a stronger capital base is important in supporting our ambition to become one of the top 10 leading banks in the Philippines,” Co said.

AUB is among the top 20 banks in the Philippines with an asset size of P131.1 billion as of end-September. It has a network of more than 228 branches nationwide.

The bank’s net income fell 25 percent to P1.2 billion in the first nine months from P1.6 billion in the same period last year due to the extraordinary gain of P400 million from the sale of foreclosed assets last year.

AUB reported its interest income breached the P3-billion mark from January to September on the back of the 44 percent jump in interest earnings on loans and receivables.