Union Bank eyes $150M to help
fund iBank buy

UNION Bank of the Philippines, which is buying International Exchange Bank (iBank), may sell as much as $150 million worth of bonds this year to help finance its acquisition.
       “Selling bonds is one of the options,” for raising money to finance the purchase, Union Bank president Victor Valdepeñas said in a telephone interview Tuesday. Union Bank said on May 5 it would buy iBank for about P13.5 billion (US$256 million).
       Union Bank’s acquisition of iBank would create the nation’s ninth-largest commercial lender, overtaking Rizal Commercial Banking Corp. and China Banking Corp., which rank ninth and 10th. Union Bank will have about P168 billion in assets according to data as of end-2005. The lender, controlled by Aboitiz Equity Ventures, said on May 10 it would continue to seek opportunities to expand.
       The plan to sell bonds has yet to get approval of the board of directors, Valdepeñas said. “We also have to talk with banks first.” Union Bank has enough “internal funds” to complete the acquisition, he said.
       Union Bank doesn’t need to borrow to boost capital, Valdepeñas said, adding that the lender’s capital adequacy ratio—a measure of financial strength—is about 46 percent against the industry average of about 17 percent. The Philippines’ central bank requires a minimum capital adequacy ratio of 10 percent.
       Union Bank shares rose 50 centavos to 47 pesos at the noon close of trading today, its highest level in 12 days. Its shares have risen 47 percent this year compared with a 9.7-percent gain of the Philippine stock market index. Bloomberg