RIZAL Commercial Banking Corp. (RCBC) has raised P3.58 billion from the first tranche of its P20-billion long-term negotiable certificates of deposit (LTNCD) program bolstering its long-term funding base.
In a regulatory filing on Friday, RCBC said it has raised P3.58 billion from the peso-denominated issue, constituting the first tranche of its LTNCD program approved by the central bank on July 12.
The notes, which carry a coupon of 5.5%, will mature in five years and six months, with intrest payments made quarterly. The notes are listed on the Philippine Dealing & Exchange Corp.
Like regular time deposits offered by banks, LTNCDs offer higher interest rates. However, LTNCDs cannot be pre-terminated but can be sold on the secondary market, making them “negotiable.”
“This latest LTNCD issuance provides us a competitive long-term funding base for the bank that will be used to support our growth objectives,” RCBC President and Chief Executive Officer Gil A. Buenaventura was quoted as saying in the statement.
He added that the lender will keep its eye out for similar opportunities to lock in attractive funding costs or explore alternative avenues that will support its strategic plans.
Prior to this, RCBC raised in June P15 billion through a stock rights offer to strengthen its capital structure and fund its business expansion.
It also offered the second tranche of its senior unsecured fixed rate notes worth $150 million in April under its medium-term note facility.
The Hongkong and Shanghai Banking Corp. Ltd. served as the sole lead manager of the LTNCD offer. It also acted as a selling agent alongside Multinational Investment Bancorporation, RCBC and RCBC Savings Bank.
A number of banks have been tapping the capital markets in recent months to raise more funds ahead of tighter risk management measures that will take effect on Jan. 1, 2019 under the international Basel 3 standards.
Other lenders such as Philippine Bank of Communications and Metropolitan Bank & Trust Co. have offered LTNCDs to support its funding needs.
RCBC posted a P2.2-billion net profit in the first half, down 6.4% from a year earlier, due to lower trading gains. — Karl Angelo N. Vidal