RIZAL COMMERCIAL Banking Corp. (RCBC) upsized its medium-term note program to raise additional capital.
In a disclosure to the local bourse on Monday, the Yuchengco-led RCBC said it has expanded its medium-term program to $2 billion from the previous $1 billion, as approved by its board on Jan. 29.
Banks usually employ a note facility to raise more capital to fund its programs and operation by issuing unsecured fixed rate notes.
The lender said that with the updated program, RCBC “retains the flexibility on favorable market conditions and tap the debt capital markets, while conforming to its term foreign currency borrowing strategy.”
In October 2015, RCBC raised $320 million from the issuance of unsecured fixed-rate notes as part of its $1-billion medium-term program.
The issuance, in denominations of $125,000 and increments of $1,000 thereafter, will mature on Feb. 2, 2021 and is listed at the Singapore Stock Exchange.
The offer received orders of over $1.3 billion, well above its intended issuance.
Credit rater Moody’s Investors Service said in a statement yesterday it has kept unchanged its (P)Baa2 grade for the updated program, which is a notch above the minimum investment grade.
Moody’s initially gave RCBC’s medium-term note program a (P) Ba2 rating, two notches below the investment grade, and subsequently upgraded it to (P)Baa3 in May 2015 and (P)Baa2 in November 2017.
The program was also rated BB by Fitch Ratings, two notches below investment grade.
Recently, local banks have been conducting various fund-raising activities to expand their networks and beef up their capital buffers.
Last month, UnionBank of the Philippines raised P3 billion from its long-term negotiable certificates of deposit, the first tranche of its P20-billion program.
In September 2017, BDO Unibank, Inc. said it will issue $700 million fixed rate senior notes under its $2-billion medium-term note program.
RCBC saw its net income climb to P4.3 billion in 2017, 11.4% higher than the P3.9 billion booked the previous year.
Latest data from the central bank showed RCBC was the tenth largest bank in the Philippines in asset terms as of September 2017.
RCBC shares closed at P47 apiece on Monday, unchanged from Friday’s finish. — Karl Angelo N. Vidal