BDO raises P60 B in fresh capital

MANILA, Philippines - BDO Unibank Inc. announced yesterday it has successfully raised P60 billion in fresh capital through a stock rights offering.

The bank said the offer was oversubscribed due to strong participation from domestic and international investors.

“This represents another milestone for the bank, with the transaction considered as the largest equity capital markets transaction by a Philippine corporate entity to date,” BDO said in a statement.

BDO plans to issue a total of 716.4 million rights shares at P83.75 per share as of listing date. The listing of the rights shares on the Philippine Stock Exchange will be posted on Jan. 31.

Credit Suisse, UBS and BDO Capital served as joint global coordinators and bookrunners, with Citigroup, Goldman Sachs and HSBC as joint bookrunners. BDO Capital also served as issue manager and domestic underwriter.

Proceeds from the stock rights offering will support the bank’s medium-term growth objectives amid the favorable macroeconomic prospects of the country.

It also aims to strengthen the bank’s Common Equity Tier 1 (CET1) capital.

“Additionally, this provides a comfortable buffer over higher capital requirements with the imposition of the domestic systemically important bank (DSIB) surcharge,” the company added.

The BSP has directed DSIBs to set aside higher levels of capital for potential losses. Too big to fail banks are characterized as banks whose distress or disorderly failure would cause significant disruptions to the wider financial system and the economy.

DSIBs are required to maintain additional CET1 of between 150 and 250 basis points of the banks’ risk-weighted assets beginning January 2017 until the same are fully in place by January 2019.

BDO’s consolidated CET1 ratio and capital adequacy ratio of 11.3 percent and 13.1 percent, respectively, are above the current regulatory minimum levels, even with the gradual implementation of the DSIB surcharge.

Over the past five years, the BDO’s customer loan portfolio grew at a 19 percent compounded annual growth rate, outpacing the industry’s 17 percent.