Banks set LTNCD, stock offerings

TWO OF THE country’s banks are seeking to expand their capital through separate fund-raising exercises, they told the local bourse yesterday.

In separate disclosures on Tuesday, Rizal Commercial Banking Corp. (RCBC) said it is set to conduct a stock rights offering (SRO), while UnionBank of the Philippines (UnionBank) announced the launch of the initial tranche of its long- term negotiable certificates of time deposits (LTNCD).

The Yuchengco-led RCBC said its board of directors approved the stock rights offer that aims to raise up to P15 billion of fresh funds, seen to strengthen its capital base and fund its business expansion.

RCBC said proceeds from the offer will bolster its position in line with Basel 3 standards, although the lender noted that its current capital ratios are already above the central bank requirements.

The fresh funds to be raised from the SRO will also fund the continued growth of its businesses, particularly in loans, the bank said.

“RCBC seeks to focus on consumer, [ small and medium enterprises], the middle market and the microfinance sector, and to pursue sustainable loan growth,” the lender said in the disclosure.

“RCBC also intends to use investments in technology to improve customer experience, broaden its customer base, and increase operational efficiency,” the lender added.

However, the timing of the SRO and other details on the offering have yet to be released, as these are still subject to the receipt of regulatory approvals and market conditions.

The SRO will be coming from the approval by the board of directors and the stockholders to raise RCBC’s authorized capital stock to P28 billion from P16 billion, or 2.6 billion authorized common shares from 1.4 billion.

Earlier, Metropolitan Bank & Trust Co. and Bank of the Philippine Islands also announced their planned SROs to fund their core business expansion and operations.

UNIONBANK

Meanwhile, Aboitiz-led UnionBank said yesterday that it has launched the first tranche of its planned LTNCD offerings.

The lender is offering at least P3 billion in LTNCDs to investors which it said will help improve its deposit maturity profile and support business expansion plans.

UnionBank’s offering has an oversubscription option. The instruments will have a tenor of five years and six months with an annual indicative rate of 4.125-4.375%.

This is the first of the bank’s approved P20- billion LTNCD program, which it previous said will carry tenors of five- and- ahalf to 10 years. UnionBank plans to raise the entire amount over a period of one year.

The final rate of the LTNCDs will be determined shortly before the end of the public offer period which will run until Feb. 9. The issue date will be on Feb. 18.

Standard Chartered Bank will serve as the sole lead arranger and bookrunner, and will also serve as a selling agent together with UnionBank and Multinational Investment Bancorporation. The LTNCDs will be listed on the Philippine Dealing Exchange Corp., the lender said. •