Manila Banco de Oro plans up to $369 mln Tier II debt

MANILA, Feb 26 (Reuters) - Banco de Oro Unibank Inc (BDO)
(BDO.PS: Quote, Profile, Research, Stock Buzz), the Philippines' second-biggest bank, said on Tuesday
it plans to issue up to 15 billion pesos ($369 million) in
unsecured subordinated debt as lower Tier II capital within a
year.

The issue would be done in tranches, with the first tranche
of 5 billion pesos meant to refinance an existing $200 million
Tier II issue callable in July, the bank said in a statement.

BDO, a unit of holding firm SM Investment Corp (SM.PS: Quote, Profile, Research, Stock Buzz)
owned by one of the country's richest men, Henry Sy, said it
has mandated HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz), ING Bank (ING.AS: Quote, Profile, Research, Stock Buzz) and Standard
Chartered Bank (STAN.L: Quote, Profile, Research, Stock Buzz) to arrange the new issue.

It did not give the date for the issue of the first
tranche.

"This will allow further expansion of BDO's consumer loan
portfolio, and boost its capital adequacy ratio, which stood at
15.3 percent as of the fourth quarter," the bank said in a
statement.

In November, the bank issued 10 billion pesos in Tier II
capital in an offer that was more than three times
oversubscribed. That issue was increased from an initial offer
of at least 5 billion pesos, with the notes carrying an
interest rate of 7 percent for the first five years.

BDO also said its board of directors approved the
consolidation of its wholly owned subsidiary Equitable Savings
Bank with the parent bank to realise cost savings, partly from
a unified bank branding and advertising.

The bank said it had net income of 6.5 billion pesos in
2007, up nearly 2 percent from 6.4 billion pesos in 2006, but
lower than its income guidance of 7 billion pesos.

BDO said this was partly due to non-recurring expenses
related to its integration after it took over Equitable PCI
Bank last year to become the country's second-largest lender
from fourth rank.

The bank also said its net interest income climbed 11
percent to 21.4 billion pesos in 2007 partly due to brisk
demand for higher-margin consumer loans. Non-interest income
fell 4 percent to 16.9 billion pesos due to lower treasury and
other income given greater market volatility, the bank said.

($1 = 40.6 pesos)
(Reporting by Rosemarie Francisco, editing by Jacqueline Wong)