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30 March 2004 - Security Bank’s Tier 2 notes offering was more than 100% oversubscribed following strong demand from both retail and institutional investors.
“We were initially targeting to issue up to Php2.5 billion but we decided to increase it to Php3.0 billion upon seeing the overwhelming response from the investors. We are very pleased with the results of this offering,” said Security Bank President and CEO Alberto
Villarosa.
The notes, which are callable at the end of five years or in 2009, will mature in 2014 and will be issued in two tranches - Series A and B. Series A notes will be sold to individuals and tax-exempt institutions and will be priced at 100% of face value with an initial yield of 12%. Series B Notes will be sold to taxable institutions and will be priced at 99.541% of face value with an initial coupon of 11.875%. The offering was priced at a premium of 1.1617% over the 5-year Mart 1 FXTN rate as of January 23, 2004.
The bank, even before the offering, has a capital adequacy ratio (CAR) of 14.5%, exceeding BSP’s required minimum of 10%. The Tier 2 proceeds will raise the bank's total capital to around P13 billion and bring up its CAR to around 20%.
ING Bank Country Manager for the Philippines Manuel R. Salak III said, “This landmark transaction marks the country’s first domestic capital market issuance for the year. We are honored to have arranged this transaction for Security Bank Corporation.”
The Notes have been rated “BB-” by international rating agency, Fitch Ratings. Security Bank is ranked among the top 10 private domestic commercial banks in terms of assets, deposits, loans, capital and return on equity as of September 19, 2003.
ING Bank N.V., Manila Branch acted as the Lead Manager, Selling Agent, and Sole Bookrunner for the Tier 2 offering. Other Selling Agents included Multinational Investment
Bancorporation, BDO Capital & Investment Corporation, and to a limited extent, Security Bank Corporation.
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