EastWest Bank, the country’s fastest-growing universal bank, has priced its stock rights offer at P21.53 per share, a 12.8-percent discount from its volume weighted average price in the last 15 trading days.
The Gotianun-led bank is offering 32.929 common shares for every 100 shares to stockholders on record as of April 21. The stock-rights offer is expected to raise some P8 billion and will involve 371,574,000 common shares. The offer period starts on April 24 and ends on April 30.
HSBC is the sole international lead manager for the undertaking and Unicapital is the sole domestic lead manager and underwriter.
The bank said net proceeds from the stock-rights offer will initially be invested in short-term investments allowed under the Bangko Sentral ng Pilipinas regulations but will eventually be reinvested in loans.
The stock-rights offer will boost EastWest’s capital adequacy ratio (CAR) to 18 percent from 13.1 percent, and common equity tier-1 ratio to 14 percent from 9.3 percent at the end of 2014, respectively.
The higher CAR which reflects stronger financials will support EastWest’s strategic growth initiatives, such as expanding its balance sheet to meet increased demand, optimizing its expanded branch store network and expanding its products and services.
“We support the measures that regulators have put in place to promote stability in the system. We have frontloaded investments in our new branches and new technology platforms which put us in a competitive position,” EastWest CFO Rene de Borja Jr. said.
“With a stronger capital base, we are confident that the key elements are in place for the bank’s continuing robust organic growth.”