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The Monetary Board has allowed Banco de Oro (BDO)-EPCI Inc. to issue
lower Tier 2 capital to finance the bank’s expansion, according to
Bangko Sentral ng Pilipinas (BSP).
Nestor S. Espenilla Jr., BSP deputy governor,
said MB has approved BDO to issue lower tier 2 capital of P15
billion.
“The BDO is expanding its business and
improving its financing structure,” Espenilla told reporters.
BDO earlier disclosed it would use the issuance
proceeds to partially refinance its outstanding debt and boost its
consumer loan portfolio.
The bank will sell up to P15 billion of
unsecured subordinated debt in tranches within one year. It has
tapped HSBC, ING Bank N.V. and Standard Chartered Bank as arrangers.
The first tranche of P5 billion would be used to
partially refinance BDO’s existing $20 million Tier 2 debt
callable by July this year. The fresh funds would also expand
BDO’s consumer loan portfolio and boost its capital adequacy
ratio, which stood at 15.3 percent last year. The loan has 10-year
maturity.
In terms of financial position, BDO’s profit
last year fell P500 million short of its P7-billion target due to
the nonrecurring expenses it incurred in the integration and
settlement of taxes under the Bureau of Internal Revenue’s
abatement program.
However, last year’s net income was two
percent higher than the P6.4 billion it posted in 2006 as BDO reaped
the benefits of the merger with Equitable PCI Bank in May.
-- Maricel E. Burgonio
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