RCBC debt offer launched

The Rizal Commercial Banking Corp. (RCBC) successfully launched a P5-billion subordinated debt offering with Deutsche Bank as lead arranger.

Originally placed at P4.5 billion, the offer attracted so much interest that RCBC and Deutsche Bank sought to upsize it to P5.5 billion as the order book was reportedly oversubscribed.

However, it was capped at P5 billion based on the recommendation of the Bangko Sentral ng Pilipinas (BSP) and the Bureau of Treasury (BTr).

The success of the transaction is even more marked, according to Deutsche Bank officials, on the heels of the recent P74-billion retail treasury bond issuance of the BTr.

The 10-year notes, issued at par, will mature on July 11, 2013 with a call option after five years from issue date. The transaction also carries an annual coupon of 12 percent, payments of which will be made on a semi-annual basis.

"Investors were provided with an early redemption option of July 2008, and the notes will be listed with the Philippine Fixed Income Exchange upon its establishment," Enrico Cruz, Deutsche Bank chief country officer for the Philippines said in a statement.

The P5-billion denominated subordinated debt offer is the first of its kind in the Philippines which RCBC vice chairman Cesar E.A. Virata linked to the strong confidence shown by the investors for the commercial bank.

"RCBC is highly pleased in the execution of the first Philippine peso-denominated subordinated bank debt offering. The strong investor interest in this offering clearly proves the deep confidence investors have in the bank," Virata said during the formal launching of the offer.

Cruz supported the views of Virata while adding that there is a strong demand for investment opportunities in the domestic capital markets.

"Just like the highly successful dollar-linked peso note issuances by the national government which Deutsche Bank introduced in year 2001, the success of the capital notes offering of RCBC was overwhelming proving our view that the domestic market is hungry for innovative and high quality debt securities," the foreign bank country chief said.

Deutsche Bank is one of the world‚s leading provider of integrated financial solutions with assets of over 802 billion euros.