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BANCO de
Oro Unibank (BDO) is raising at least P5 billion in
Lower Tier 2 capital to support business growth and
refinance $200 million in existing Tier 2 notes callable
in July.
President Nestor Tan said the debt issuance will be used
to improve the bank’s balance sheet and risk profile.
“The capital is part of the long-term strategy to
stabilize capital and to make our balance sheet more
efficient. This year we are keen on using debt to
support growth,” he said Monday at the launch of the
subordinated debt.
For the
first tranche, the bank is issuing P5 billion worth of
unsecured subordinated notes with a maturity of 10 years
and the interest rate fixed at 8.5 percent in the first
five years. The bank has an approved debt-issuance
program of P15 billion this year.
The
Hongkong and Shanghai Banking Corp Ltd. (HSBC), ING Bank
N.V. and Standard Chartered Bank were named as lead
arrangers and market makers of the float. HSBC also took
on the role of public trustee, while the Philippine
Depository and Trust Corp. was designated as registrar
and paying agent.
The bank
last issued unsecured subordinated notes—Lower Tier 2
capital worth P10 billion—in November 2007, and which
would fall due on 2017. The existing $200-million Tier 2
notes were issued in October 2002.
The bank
sees its net income to rise 13 percent to P7.4 billion
this year due to strong loan and deposit growth.
It also
expects its net interest income to increase by 27
percent to P27.27 billion because of strong demand for
loans.
However,
the bank said it expects noninterest income to fall 9
percent to P15.3 billion on lower trading gains.
For the
first quarter this year, BDO posted a net income of
P1.34 billion down 24 percent from a year earlier due to
weak trading gains despite higher net interest income
and nontrading income for the period.
Among
the bank’s growth strategies this year is to attract
more corporate clients, expand its middle-market
business through increased lending and to consider
potential acquisitions, according to BDO senior vice
president and head of investor relations Luis Reyes.
Tan
said, however, that the bank is focusing its energy this
year on the ongoing integration with recently acquired
Equitable PCIBank. “... We hope to finish the
integration at the end of the year. But if there are
other opportunities for acquisition, we will look into
it,” he added. |
