Cathay Life Insurance hikes stake in RCBC

MANILA, Philippines — Cathay Life Insurance Co. Ltd. of Taiwan spent P416 million to beef up its stake in Rizal Commercial Banking Corp. (RCBC) after the Yuchengco-led bank raised P2.5 billion from a recent fund raising activity.

In a disclosure to the Philippine Stock Exchange (PSE), RCBC said the largest publicly listed financial holding company in Taiwan raised its shareholdings in RCBC to 23.35 percent from 22.71 percent.

The Taiwanese firm acquired 7.62 million shares of RCBC at P51.25 per share for a total consideration of P390.65 million last Sept. 6 and another 500,000 shares at P51.5 per share or P25.75 million last Sept. 7.

This brought the total number of RCBC shares owned by Cathay Life Insurance to 326.93 million from 318.81 million.

Cathay Financial Holding Co. Ltd. acquired a 20 percent stake in RCBC in 2015 for P7.95 billion.

It has been beefing up its interest in the Yuchengco-led bank over the past few years. It spent P43.82 million to raise its stake in RCBC to 22.77 percent last month and P174 million to beef up its shareholdings to 22.71 percent in March last year.

Pan Malayan Management and Investment Corp., founded by the late taipan Alfonso Yuchengco, remains the largest shareholder in RCBC with 594.25 million shares equivalent to a 42.45 percent stake. The World Bank’s International Finance Corp. and IFC Capitalization (Equity) Fund own 107.87 million shares for a 7.71 percent stake.

RCBC has raised P2.5 billion through the issuance of through the issuance of long-term negotiable certificates of deposits (LTNCDs) as part of a strategy to support its asset portfolio and offer new investment securities to investors.

The amount was 25 percent higher than the original volume of P2 billion due to strong demand from investors that allowed the bank to price at the lower end of its pricing guidance for the LTNCDs set to mature in five years and six months with a fixed rate coupon of 3.75 percent per annum.

Chet Luy, senior executive vice president and head of Financial Advisory and Markets Group at RCBC, said the bank has one of the most diversified sources of funding among its peers, having accessed the dollar loan syndications market, the dollar senior unsecured bond and hybrid Tier 1 notes market as well as the Tier 2 notes market.

He said RCBC is a pioneer in the LTNCD market being the second bank to be listed as an issuer since the public market opened in 2008.