PBCom offers 5.5-year LTNCDs for long-term funding

THE PHILIPPINE Bank of Communications (PBCom) started offering long-term negotiable certificates of time deposit (LTNCD) on Monday to strengthen its long-term funding.

In a disclosure to the local bourse on Tuesday, the Co-led lender said it has started selling an undisclosed amount from the peso-denominated notes since Monday.

The papers being offered will mature in 5.5 years and will be sold in denominations of P50,000 and in increments of P10,000 thereafter.

The LTNCDs will carry a rate of 5.375% to 5.625% to be paid quarterly.

The issuance marks the first tranche of its P5-billion longterm note program approved by the central bank last July.

PBCom said the sale is set to run from Sept. 17-28. The rate will be finalized at the end of the offer period.

ING Bank N.V. (Manila branch) and Development Bank of the Philippines will serve as joint lead arrangers and bookrunners of the offer.

These lenders will also serve as selling agents for the offer alongside PBCom.

Like regular time deposits offered by banks, LTNCDs offer higher interest rates. However, LTNCDs cannot be pre-terminated but can be sold on the secondary market, making them “negotiable.”

The notes are exempt from the 20% withholding tax to investors if held for more than five years.

PBCom said it launched its maiden LTNCD offering to “further boost its strategic initiatives and meet its growth prospects moving forward.”

“The funds will be used for general corporate funding with an emphasis on long-term funding,” the lender said in the regulatory filing.

A number of banks have been raising additional capital ahead of tighter risk management requirement by the central bank which will take effect next year under the international Basel 3 standards.

Metropolitan Bank & Trust Co. as well as Rizal Commercial Banking Corp. are also currently offering LTNCDs to support their funding needs.

PBCom posted a P146.3 million net income in the second quarter, declining by 20% from the P183.8 million tallied a year ago.

The listed lender, the 20th biggest in the industry in asset terms, is currently licensed as a commercial lender and had a network of 89 branches and 147 automated teller machines as of end-June. •