Rizal Commercial Banking Corp. (RCBC, PSE: RCB) successfully priced a Reg S only US$300 million 6.50% PNC5 Additional Tier 1 securities. The transaction is the first Additional Tier 1 securities issuance of RCBC and also the very first Additional Tier 1 offering out of the Philippines. The successful AT1 offering also reopens the US$ AT1 bond market of Southeast Asia after the most recent issuance in February 2020.
RCBC is among the Top 10 universal banks in the Philippines that provides a wide range of banking and financial products and services. RCBC is currently rated Baa2 Stable by Moody’s. The Additional Tier 1 securities, which feature a permanent writedown mechanism under Non-Viability Event, are expected to be rated Ba3 by Moody’s. The proceeds of the offering are intended to be used to: (1) support and finance medium-term to long-term asset growth and other general corporate purposes; and (2) comply with and maintain sufficient buffers above the minimum capital thresholds required by the Bangko Sentral ng Pilipinas (BSP).
RCBC successfully priced the notes at 6.500%, 25bps tighter than the initial price guidance. The orderbook at the peak was over US$825 million and at the final price guidance level was over US$600 million with orders from 57 accounts. By geography, Asian accounts were allocated 79% and Europe accounts, 21%. By investor type, asset managers were allocated 59%; hedge funds, 17%; and private bank, 24%.
Credit Suisse acted as the sole coordinator and sole bookrunner for the transaction.