RCBC’s $300 million bond issuance gets BSP approval

MANILA, Philippines — Yuchengco-led Rizal Commercial Banking Corp. (RCBC) has received the approval of the Bangko Sentral ng Pilipinas to raise as much as $300 million from the offshore market through the issuance of debt securities.

In a disclosure to the Philippine Stock Exchange, RCBC first vice president and corporate information officer Ma. Christina Alvarez said the BSP has approved the bank’s application to issue offshore non-cumulative subordinated additional Tier 1 capital securities qualifying as additional Tier 1 capital under Basel III on Aug. 13.

On June 29, the board of directors of RCBC approved the proposal to issue non-cumulative unsecured subordinated capital securities that are eligible as additional Tier 1 capital under Basel 3.

The net proceeds of the fund raising activity will be used to support RCBC’s loans to customers and other general corporate purposes in line with eligible green and social categories as defined in its sustainable finance framework.

A Reg S only dollar-denominated perpetual non-call five-year non-cumulative subordinated additional Tier 1 securities offering will follow after a series of fixed income investor calls arranged by sole global coordinator and bookrunner Credit Suisse subject to market conditions.

Moody’s Investors Service has assigned a Ba3 rating to RCBC’s proposed US dollar, perpetual, non-cumulative and subordinated additional Tier 1 capital securities.

Early this year, RCBC further hiked the size of its medium term note program to $3 billion from $2 billion. It has been regularly updating its offshore borrowing program, launching $1 billion in 2011 and doubling to $2 billion in January 2018.

The bank, owned by the family of the late taipan Alfonso Yuchengco, raised $1.59 billion of the total amount, including $275 million in January 2012, followed by $243 million in January, and another $320 million in October 2015, $300 million in March and $150 million in April 2018, and another $300 million via the issuance of sustainability bonds last September.

The listed bank has also been tapping the onshore debt market for much needed funds after it more than tripled its bond and commercial paper program to P100 billion, instead of P30 billion, to further strengthen the its regulatory liquidity ratios.

Last July, RCBC raised P16.6 billion via the issuance of peso bonds with a fixed interest rate of 3.25 percent per annum.

In all, RCBC has raised P70.75 billion, including P7.05 billion in April, as well as P30.5 billion via the issuance of bonds, P7.5 billion via the issuance of fixed-rate bonds, P15 billion via the issuance of the first peso-denominated Association of Southeast Asian Nations (ASEAN) green bonds, and another P8 billion from the maiden ASEAN sustainability bonds last year.