Fitch rates Rizal notes B+

Fitch Ratings said it assigned a long-term rating of B+ to Rizal Commercial Banking Corp.'s proposed issue of Philippine peso-denominated subordinated notes due 2018, callable with step-up in 2013 of up to PHP7 billion. The rating is one notch below the company's long-term local-currency issuer default rating of BB-.

The outlook is positive.

The notes will be direct, unsecured and subordinated obligations of the company and will rank pari passu with all subordinated debts that qualify as lower tier-2 capital. Proceeds will be used to refinance existing subordinated notes and general corporate purposes.

The company intends to increase market share in the competitive consumer and SME lending segments through a wider distribution platform, Fitch said. Its recent proposed acquisition of Merchants Savings and Loan Association, Inc. is a step in this direction, the agency said.

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