RBC Merchant Bank Caribbean Ltd has announced the successful completion of a landmark $300 million fixed rate, unsecured subordinated bond, issued on behalf of RBC Royal Bank (Trinidad and Tobago) Ltd.
The bond issue brings a much needed boost to the domestic capital markets, providing opportunities for investment in a high-quality asset while at the same time increasing local participation and investment in RBC Royal Bank, the bank said in a statement yesterday.
Signed in December 2012, the bond represents a milestone as it marks the first of its kind for the bank's parent company, RBC, outside of Canada. The 15-year fixed subordinated bond, which is callable after year ten, bears interest at a fixed rate of 4.75 per cent semiannually, until it reaches maturity in 2027.
As one of the world's largest banks by assets and market capitalisation, RBC (Canada) is currently rated 'A' by Standard & Poor's and 'A1' by Moody's for subordinated debt.
Commenting on the deal, Suresh Sookoo, chief executive, Caribbean Banking, RBC said: "As a well-capitalised and stable institution, we have successfully introduced a product into the market which further secures our position as a bank intent upon satisfying the needs of other capital-raising institutions."
"Ultimately, this investment is a part of our commitment to stimulate the local capital market and place ourselves in the best position to fully serve the needs of investment clients at home and across the region."
"RBC Royal Bank will continue its best practices strategy of optimising capital usage to earn high risk-adjusted returns on assets and equity. As we continue to raise funds from the debt capital market to strengthen our capital base, we will continue to diversify our investor base and provide additional financial flexibility to our Caribbean Banking Group," Sookoo added.
RBC Financial (Caribbean) Ltd is the second largest financial institution by assets in the English Caribbean, with branches in 20 countries and territories and has consistently maintained a track record of successfully raising financing from local and regional bond markets.