Philippine Daily Inquirer
3:01 pm | Thursday, December 26th, 2013
THE RCBC Plaza. INQUIRER FILE PHOTO
MANILA, Philippines — Yuchengco-led Rizal Commercial Banking Corp. has retired the remaining P4 billion tier 2 notes in its books ahead of the implementation of Basel 3 capital adequacy ratio framework which no longer makes these eligible as supplementary capital.
In a disclosure to the Philippine Stock Exchange on Thursday, RCBC said it recently fully paid these P4 billion unsecured subordinated notes due 2019, exercising the early redemption option on the notes.
Under the Basel 3 framework, which the Bangko Sentral ng Pilipinas has required commercial and universal banks to follow by January 2014, these subordinated notes will no longer qualify as capital.
Basel 3 introduces a complex package of reforms designed to improve the ability of banks to absorb losses and also extends the coverage of financial risks and installs stronger firewalls against periods of stress.
The notes were issued in 2009 and would have matured on May 15, 2019 if they were not redeemed early by RCBC.
RCBC’s recently retired debt notes carried interest at the rate of 7.75 percent per annum payable quarterly. If not redeemed, the interest rate would have increased in line with the “step-up” rate provision.
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Tags: banks , Basel 3 Capital Adequacy Ratio , Business , debt notes , RCBC , Rizal Commercial Banking Corp. , tier 2 notes
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