Saturday, May 26, 2012

PSE okays BDO's $1-B rights offer

MANILA, Philippines - The Philippine Stock Exchange (PSE) has approved the $1-billion rights offer of BDO Unibank Inc. (BDO), which will be classified as core capital. It will be the biggest rights offer in the country’s history. BDO chairperson Teresita T. Sy said the capital raised would be used to fuel medium-term growth for the bank. Likewise, it may set aside an amount in anticipation of the more stringent Basel III capital guidelines of the Bangko Sentral ng Pilipinas (BSP) Under the Basel III capital framework, the BSP will be raising the capital adequacy ratio (CAR) from the present 10 percent to 12.5 percent, as well as double the Tier 1 ratio from five to 10 percent by 2014. “The bank is optimistic about the outlook on the Philippine economy and hopes to continue with its faster-than-industry loan growth, driven by a strong consumer sector and opportunities in the SME, middle market and large corporate segments,” Sy added. Initial reports indicate that the rights offer is enjoying on 1:3 ratio, which will be offered at an indicative discount of 20 to 25 percent to market. This will allow all shareholders to proportionately participate in the capital-raising program. The offer price, to be fixed on June 5, will be based on the 10 to 15 trading-day volume-weighted average price of BDO shares prior to the pricing date, subject to a discount of 20 to 25 percent. Strategic investors SM Investments Corp. (SMIC), the International Finance Corp., and the United Overseas Bank (UOB) have expressed support for BDO’s expansion plans and the proposed rights offer. The IFC is the private investment arm of the World Bank. BDO Capital & Investment Corp. is the lead issuer and domestic underwriter. The joint international lead managers and international underwriters are Citigroup Global Markets Inc., Deutsche Bank AG, Hong Kong branch, JP Morgan Securities Ltd., and United Overseas Bank Ltd. - By Ted P. Torres