MANILA, Philippines – State-run Development Bank of the Philippines (DBP) will exercise the call option on its unsecured subordinated notes qualifying as Tier 2 capital amounting to P6.5 billion as it prepares for the implementation of Basel 3.
The bank said the early notes redemption would lead to interest savings as it implements stricter capital standards and discipline by removing from its qualifying capital notes issued prior to the implementation of Basel 3, a global regulatory framework for more resilient banks and banking systems.
The notes were issued on Sept. 1, 2008 with coupon rate of 7.75 percent. The call option date is on Sept. 2, 2013.
As of the first six months of 2013, DBP’s capital adequacy ratio rose to 23.9 percent from 21.6 percent.
DBP said the call option amount will be the face value of the notes plus unpaid and accrued interest based on the initial interest up to but excluding the call option date.
“There shall be no more secondary trading of the notes or modifications in the accounts after the book closure date,” the bank said.
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DBP is currently the seventh-largest bank in the country in terms of assets, and is the second-largest government-owned bank, next only to the Land Bank of the Philippines.
It is also one of the largest government-owned and controlled corporations (GOCCs) in the Philippines.