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BANCO de
Oro-EPCI Inc. said Wednesday it will raise capital by
selling P5 billion worth of 10-year bonds and that
proceeds will be used to grow capital base and
consumer-loan portfolio as well as refinance the
$200-million Tier-2 obligations of EPCI maturing next
year.
The sale
starts today until November 16.
At the
sidelines of BDO Investors’ Forum, president Nestor Tan
told reporters the fundraising activity will support the
growth strategy of the merged entities in the coming
years.
“We
actually have the authority to sell up to P10 billion
worth of subordinated notes. However, we’d like to do it
in tranches so we will start with the P5 billion first,”
he said.
The
Bangko Sentral ng Pilipinas allows local banks to
issue subordinated debts notes to comply with
capital-adequacy requirements (CAR).
Currently, BDO’s CAR is around 13 percent, above the
minimum requirement of 10 percent.
The
notes will mature in 10 years, with the issuer having an
option to redeem at the end of the fifth year. Interest
rate, on the other hand, is pegged at 7 percent per
annum for the first five years. In the event the BDO
does not exercise the redemption option, there will be a
step-up spread equivalent to 150 percent of original
credit spread.
BDO has
tapped HSBC as lead arranger the issue.
Currently, the country’s second-biggest lender in terms
of assets, BDO’s strategic focus is to maintain its
position as a leading full-service bank in the
Philippines. Its principal markets are currently the
corporate market, the middle-market banking segment and
the retail/consumer market.
It plans
to expand presence in the middle-market and
retail/consumer segments, capitalizing on the goodwill
and distribution network of the entities affiliated with
parent SM Investments Corp. to tap SM Group’s clients
and suppliers.
As of
end June, the merged entity has a network of 684
branches. |
