RIZAL Commercial Banking Corp. has exercised its call option on the notes. — BW FILE PHOTO

RIZAL COMMERCIAL Banking Corp. (RCBC) has exercised its call option on the P10-billion notes it issued back in 2014 to comply with regulatory capital requirements, it said on Tuesday.

“This is to advise the Exchange that the Rizal Commercial Banking Corporation has completed the exercise of its call option on the P10 billion 5.375% unsecured subordinated debt qualifying as Basel III-Tier 2 capital due 2024,” the bank said in a disclosure.

RCBC raised P10 billion worth of unsecured subordinated Tier 2 notes back in 2014.

The notes, which have a tenor of 10 years and three months, had an early redemption option for the bank after five years and three months.

Basel 3 is a set of reforms introduced by the Basel Committee on Banking Supervision, which were gradually implemented by the Bangko Sentral ng Pilipinas for local banks.

Among the reforms implemented was the introduction of capital buffers to withstand economic and financial stress, among others.

RCBC returned to the US dollar bond market last month as it issued $300 million in five-year unsecured sustainability bonds to support its loan portfolio and green projects.

The notes, which bear a coupon rate of 3% per annum, was a drawdown from its $2-billion medium-term note program under its Sustainable Finance Framework.

RCBC established its Sustainable Finance Network in May, which serves as a framework for sustainable financing instruments to fund loans and projects that have environmental and social benefits.

In June, RCBC issued P8 billion in two-year Association of Southeast Asian Nations (ASEAN) Sustainability Bonds, the first of its kind in the Philippines under the ASEAN Sustainability Bond Standards 2018. The proceeds of the issue will fund environmental and social projects.

The two-year debt papers carry a coupon of 6.15% per annum to be paid quarterly until May 2021. RCBC saw strong demand from retail investors, prompting it to upsize the issuance from the P5 billion it initially intended to offer.

In January, the bank also raised P15 billion worth of 1.5-year green bonds under its green finance framework. Proceeds of this issuance will be used to support RCBC’s expansion and initiatives in the green space.

RCBC’s consolidated net income climbed 23% year-on-year to P2.7 billion in the first semester, backed by the continued growth of its core businesses.

Shares in RCBC went down 20 centavos or 0.75% to P26.30 apiece on Tuesday. — BML