The Rizal Commercial Banking Corp. (RCBC) plans to sell up to $400 million in so-called senior notes whose proceeds the lender will use to finance various undertakings while taking advantage of cheaper interest costs prevailing at the moment. The proposed sale forms part of an earlier authority to sell $1 billion worth in medium-term notes (MTN).
RCBC’s board of directors authorized the sale only on Monday and include the mandate to engage in a bond-exchange program on IOUs due in 2017. RCBC aims to swap $275 million worth of senior notes for newer and cheaper IOUs.
RCBC Acting Treasury Group Head and concurrent Retail Banking Group Chief Raul Victor Tan said the sale is subject to favorable market conditions and other considerations. “We have not finalized the rate and term. We will make the decision in the coming weeks,” Tan said.
In January this year, the bank successfully raised $200 million in five-year senior unsecured fixed-rate notes off its $1-billion MTN Programme.
The notes carried a coupon and yield of 4.25 percent and will mature in January 22, 2020.
The following February, RCBC reopened its 2020 senior notes and issued a second tranche amounting to $43 million with a coupon and yield of 4.25 percent under the same program.
The 2020 senior notes were used to finance operations and for general corporate purposes, including the refinancing of the RCBC’s $250-million 6.25-percent senior notes due on February 9, 2015.
This sale was approved by the lender’s parent firm’s board on November 24, 2014. Its board also approved the appointment of John Thomas G. Deveras as head of asset management and remedial group concurrent with his role as head of strategic initiatives effective October 25, 2015.
Deveras, a seasoned banker with more than 30 years of experience in investment banking and corporate finance, has been with RCBC since 2007. He graduated from the Ateneo de Manila University with a degree in Management Engineering and obtained his Masters Degree in Business Administration from the University of Chicago.