Resources for Basel II Capital Accord (Basel II)

Fitch Assigns 'B+' to Philippines' Rizal Commercial Bank's Lower Tier-2 Bond

finchannel.com

Fitch Ratings has on February 6 assigned a Long-term rating of 'B+' to Philippine-based Rizal Commercial Banking Corp's (RCBC) proposed issue of Philippine peso denominated subordinated notes due 2018, callable with step-up in 2013 of up to PHP7 billion.

The rating on the issue - which is intended to qualify for Lower Tier-2 Capital as per the Bangko Sentral ng Pilipinas (BSP) guidelines - is one notch below RCBC's Long-term local currency Issuer Default Rating (IDR) of 'BB-' (BB minus), which is on a Positive Outlook; this is in accordance with Fitch's criteria of rating subordinated debt instruments of financial institutions. The Notes will be direct, unsecured and subordinated obligations of RCBC, and will rank pari passu with all subordinated debts that qualify as Lower Tier-2 Capital. The rights of the Noteholders of the proposed issue will be subordinated to the claims of depositors and other senior creditors but senior to share capital and Tier-1 Capital Securities. The net proceeds would be used to refinance RCBC's existing subordinated notes and for general corporate purposes.

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