RCBC, the flagship company of the Yuchengco Group of Companies headed by former Ambassador Alfonso Yuchengco, is raising at least 2 million from the follow-on offering to boost its equity portfolio and allow it to enter the the country’s top 5 banks, edging out Philippine National Bank for fourth place.

The offer, which is priced at P27.00 per share, is now said to be doing P29.50 over the counter. Stock analysts note that the large size of the deal in relation to current liquidity and the fact that the stock has already risen 58 percent year to date, made the pricing reasonable.

The bank has completed the institutional portion of the offering that has the potential to increase its free-float from 8 percent to 28 percent.

While the first day of the roadshow on March 5 coincided with a broad selloff in Asian equity markets, the international sales tour resulted in an oversubscription of almost 2 times, with about 40 investors in the book.

The international tranche, which accounted for 146.1 million shares – or 80 percent of the base offering of 182.6 million shares, attracted investors from Asia (60 percent), the US (30 percent) and UK (10 percent).

A survey on the type of investors revealed 60 percent as being long-term investors and 40 percent possibly cashing in on the short term.

Analysts from various trading houses said "good quality" investors were buying into the company believing that newly-hired CEO Lorenzo Tan, will be able to perk up RCBC’s performance.

Tan noted earlier that "RCBC has a very good franchise. I have only been in the bank for 7 weeks and I think, given the chance to put in a few additional highly skilled bankers to assist me, we can build it to one of the five biggest financial services groups in the Philippines."

Most economic analysts likewise see the Philippines as a great macro economic success story at the moment with falling interest rates and a rebounding property market.

"Timing is on our side. Our goal for RCBC is to build a stronger foundation for its future. I am confident we can build it the way we want to," Tan declared.(JAL)