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By Maricel E. Burgonio, Reporter
BANCO De Oro Unibank Inc. (BDO) said it doubled
the amount it plans to borrow through the sale of unsecured
subordinated debt papers after strong demand for the IOUs. In a
statement, BDO said it cut short its offer period, which was
supposed to last until May 23, as the lender was able to generate
ample interest in its planned borrowing.
The bank set the issue size at P10 billion, or
double the P5 billion it had planned to offer.
It said the proceeds from the Tier 2 offering
would be used to support business expansion plans and refinance a
dollar-denominated unsecured subordinated debt that the bank can
redeem this July.
The funds raised would also strengthen BDO’s
capital base.
Nestor Tan, the bank’s president, earlier said
its capital adequacy ratio is projected to settle at 12 percent to
13 percent this year, lower than the 15.2 percent last year as the
lender adopts stricter capital requirements under Basel 2.
Tan said the bank will focus on its integration
with Equitable-PCI Bank this year, completion of which would cost an
estimated P2 billion.
BDO’s latest IOUs would pay a coupon rate of
8.5 percent per annum and will be issued at 100 percent of face
value on May 30.
Hong Kong and Shanghai Banking Corp. (HSBC), ING
Bank and Standard Chartered Bank were joint lead arrangers, selling
agents and market makers for the issue. HSBC acts as public trustee
for the note holders.
BDO has total assets of P627 billion, capital
funds of P57 billion and a network of 658 domestic branches.
It expects to increase its net income by 13
percent to P7.407 billion this year from P6.570 billion last year.
The lender is banking on strong growth of loans, deposits and
fee-based to boost its earnings. It however sees a significant
decline in trading gains and an increase in operating expenses.
BDO posted a 24 percent drop in net income to
P1.34 billion in the first quarter this year, compared with P1.77
billion in the same period last year due to a significant drop in
trading and foreign exchange gains.
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