Banco de Oro Unibank Inc. (BDO) on Thursday said it is going for an option to redeem P10 billion worth of subordinated notes this May or five years ahead of its maturity.
The P10-billion “Unsecured Subordinated Notes Eligible as Tier 2 Capital” were issued on May 30, 2008 and were due 2018.
Subject to Bangko Sentral ng Pilipinas (BSP) approval, all of the notes will be redeemed “in cash at a redemption price equal to the face value, plus accrued interest covering the accrued and unpaid interest as of but excluding May 31, 2013,” the bank said.
BDO senior vice president Luis S. Reyes Jr. said the notes will not meet the change in rules of Basel III, which will be adopted next year. “The BSP will not recognize this as qualifying capital for computing CAR (capital adequacy ratio), so we have the option to redeem,” he told GMA News online in a phone interview.
Last year, the BSP said it will implement by January 1, 2014 the Basel III standards, or the new global benchmarks on capital conversion, common equity Tier 1, and total Tier ratio that will impact on banks’ debts and asset positions.
In July 2012, BDO strengthened its common equity Tier 1 capital as it raised round P43.5 billion or about $1 billion in additional capital after completing its stock offering of 895.2 million common shares at P48.60 apiece on Philippine Stock Exchange.
Touted as the highest equity transaction by a single issuer, the new BDO shares were listed on July 4, 2012. — VS, GMA News
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