Tuesday, November 13, 2007 BDO to float P5B capital for future developments
THE Henry Sy-led Banco de Oro (BDO) is ready to float P5 billion in supplementary capital to fund the bank’s future developments through an increased capital base.
BDO senior vice president and head of investors’ relations Luis Reyes said the bank will issue 10-year unsecured subordinated notes with an optional redemption on the fifth year that allows the issuer to redeem the bond.
“We are issuing these notes to expand the bank’s lending activities as we hope to increase and strengthen our capital base and fund further growth,” he said during the Investors Forum last Thursday at Cebu City Marriot Hotel.
Interest rate
Reyes said the note issue—half of the bank’s P10-billion peso capital-raising plan earlier approved by the Bangko Sentral ng Pilipinas—carries a seven percent interest rate for the first five years.
He said more than 50 percent of the issue will be used to finance the bank’s consumer loan portfolio that includes residential loans and other mortgage.
The rest will be spent to fund commercial loans and corporate portfolio, he added.
BDO announced that the offer period of the P5 billion notes started last Nov. 8 and will end on Nov. 16.
Selling agent
The bank has commissioned the Hongkong and Shanghai Banking Corp. (HSBC) as the lead arranger or the selling agent of the notes issue.
Lynette Ortiz, HSBC senior vice president and head of debt capital markets, said the remaining P5 billion of the capital-raising program will be issued depending on the market reception of the first notes offer, as well as the discretion of BDO.
“We continue to be very bullish in Cebu, considering our big presence here,” said Reyes.
He said this is the first peso-denominated capital issue launched since BDO’s merger with Equitable Bank last May 2007.
BDO is the second largest bank in the Philippines with reported consolidated assets of P602.9 billion.
