Yuchengco-led Rizal Commercial Banking Corp. (RCBC) is braving the domestic debt market even with the coronavirus disease 2019 or COVID-19 pandemic, eyeing to raise P3 billion from the issuance of bonds.

The country’s 9th largest lender in terms of assets has started offering two-year peso fixed rate bonds with a fixed interest rate of 4.848 percent per annum until March 27.

“The bonds will be offered with a minimum issue size of P3 billion, with an option to upsize,” RCBC said, adding the offer period from March 23 to 27 may be shortened or extended by the bank in consultation with the sole lead arranger and the financial advisor.

RCBC has tapped HSBC as sole lead arranger and bookrunner together with RCBC Capital Corp as the financial advisor for the fund raising activity, while HSBC and RCBC are the selling agents.

“The bank acknowledges the logistical and execution challenges given current conditions around COVID-19, and it is grateful to the parties involved in being able to set up its program documentation last March 17,” RCBC said in a disclosure to the Philippine Stock Exchange (PSE).

The bank, founded by the late taipan Alfonso Yuchengco, has been tapping the onshore and offshore debt markets to support asset growth, refinance maturing liabilities, and other general funding purposes.

It decided to more than triple its bond and commercial paper program to P100 billion instead of P30 billion to further strengthen the its regulatory liquidity ratios.

Last year, RCBC raised P30.5 billion via the issuance of bonds, P7.5 billion via the issuance of fixed-rate bonds, P15 billion via the issuance of the first peso-denominated Association of Southeast Asian Nations (ASEAN) green bonds, and another P8 billion from the maiden ASEAN sustainability bonds.

The Yuchengco-led bank also increased the size of its medium term note program to $3 billion from $2 billion.

The net income of RCBC jumped 25 percent to P5.4 billion last year from P4.3 billion in 2018, driven by the expansion of its core business complemented by high margin, strong trading gains, and higher fee-based income.

Companies have shelved their planned fund raising activities as financial markets continued to plunge amid the impact of the COVID-19 pandemic.

For one, diversified conglomerate San Miguel Corp. has deferred the planned issuance of P60 billion worth of commercial papers until such time conditions stabilize, while BDO Unibank Inc. of the family of the late retail and banking magnate Henry Sy has also put on hold its planned P5 billion bond issuance to allow investors to reassess their investment and liquidity needs amid the crisis.

Source PhilStar Global