PUBLICLY listed Asia United Bank (AUB) is offering up to P5 billion in Tier 2 unsecured subordinated notes to boost its capital base and comply with the central bank’s Basel III regulations.
In a disclosure to the Philippine Stock Exchange, AUB said the Tier 2 notes will be offered to the general public from November 4 to 16, 2015, with an issue date of November 25.
The bank said it will issue the Tier 2 notes in one or more tranches within one year, with a maturity of 10 years from the issue date of each tranche.
At its option, the bank said it may redeem any tranche of the Tier 2 notes on any interest payment date falling after the fifth anniversary of the tranche’s issue date.
The issue price is at 100 percent of the face value of the notes. The indicative yield ranges from 5.5 percent to 5.875 percent, with the final rate to be announced at the end of the offer period, it added.
The offer has a minimum investment amount of P500,000, with additional increments of P50,000.
“While the offer period is scheduled to run from November 4 to 16, the bank reserves the right to shorten the offer period as needed,” it said.
“The net proceeds of the Tier 2 notes will also strengthen AUB’s capital adequacy based on the requirements of the Bangko Sentral ng Pilipinas,” it said.
Observing international standards, the central bank in 2014 ordered universal and commercial banks in the Philippines to comply with Basel III’s 10-percent capital adequacy ratio standards with Tier 1 common equity and Tier 1 capital ratios of 6 percent and 7.5 percent, respectively.
“By continuously embarking on ways to redefine our value proposition to our clients, we are staying a step ahead in innovation and technology, as well as reaching out to more customers who are starting to reap the benefits of our investment in expanding our network and in product offerings,” said AUB president Abraham T. Co.
Co stressed that having a strong capital base is important in supporting AUB’s ambition to become one of the top 10 leading banks in the Philippines.
The transaction will have BDO Capital and Investment Corp. (BDO Capital) and Deutsche Bank AG Manila Branch (DB) as joint lead arrangers and joint bookrunners.
In addition to BDO Capital and DB, AUB said the other selling agent is Multinational Investment Bancorporation, with AUB also acting as a limited selling agent.
“Interested investors may contact any AUB branch or any of the arrangers/selling agents for more details and required documentation,” it said.
As of end-June this year, AUB had an asset size of P131.4 billion, with a network of more than 200 branches and 239 ATMs nationwide.