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Thursday, June 26, 2003
RCBC to issue P4.5B in 10-yr. capital notes
By Jessica B. Natad
RIZAL Commercial Banking Corp. (RCBC) has shown confidence in Cebu-based investors as manifested by the launching of its tax-free capital notes offering in the province.
Cebu is the first stop of RCBC’s roadshow for the issuance of up to P4.5 billion worth of capital notes or unsecured subordinated notes, which will mature on 2013. RCBC is launching the offering in Manila today, RCBC director of the board Cesar Virata said.
“We are offering the notes as alternative investments for investors. This is a very good alternative investment. Your capital is safe and the interest, which is higher than the five-percent interest rate of the five-year notes issued by the government, is fixed for the 10 years,” he said on the sidelines of the launch at the Cebu City Marriott Hotel Tuesday.
Virata said qualified investors—individuals and tax-exempt institutions—can buy the notes at a minimum of P500,000 from June 30 to July 4 at any of RCBC’s branches. The date of issuance will be July 7.
The notes’ fixed interest rate, which will be payable semi-annually, will be based on the five-year Mart 1 FXTN rate of July 7.
The Mart 1 FXTN is the rate for the Money Market Association of the Philippines Treasury Notes Benchmark for notes with the time to maturity equal to five years, appearing on the Bloomberg Page Mart 1, according to a document furnished Sun.Star.
The note’s rate will be the FXTN rate of July 7 plus 25 to 50 basis points. The FXTN rate as of Tuesday was 9.9375 percent, Virata said.
The proceeds of the offering will be used to supplement RCBC’s working capital and to expand its operations in the country.
“The notes will enable the bank to do more business in the country, such as increasing its lending activities. The proceeds will also replace the P2 billion we distributed to shareholders last year,” said RCBC executive vice president Jaime Panganiban.
RCBC’s existing capital fund is now P16 billion excluding the notes.
Virata said RCBC is the first Filipino bank to issue capital notes in pesos. Some banks, like the Metropolitan Bank and Trust Co., had issued dollar-denominated capital notes outside the country.
RCBC is a universal bank formed in 1960. It is 56 percent owned by the Yuchengco group of companies.
RCBC’s issuance of capital notes is governed by the memorandum of the Bangko Sentral ng Pilipinas to all banks and non-bank financial institutions on the issuance of unsecured subordinated debt instruments eligible as Tier 2 capital.
(June 26, 2003 issue)
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