PNB raises P8.22 billion from 5.5-year LTNCDs

PHILIPPINE NATIONAL Bank (PNB) issued P8.22 billion worth of long-term negotiable certificates of deposit (LTNCD), which will be used to extend the lender’s maturity profile.

At the ceremonial listing on Wednesday at the Philippine Dealing & Exchange Corp. (PDEx) in Makati City, the Lucio C. Tan-owned lender said it raised P8.22 billion from the peso-denominated issuance.

The notes will mature in 5.5 years and carry an interest rate of 5.75% to be paid quarterly until 2024.

The issuance marks the first tranche of PNB’s P20-billion LTNCD program approved by the Bangko Sentral ng Pilipinas in October 2018.

Proceeds from the LTNCD program will be used to extend the lender’s maturity profile, comply with liquidity ratios, and gain longterm funds for general corporate purposes, the bank said in January.

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.”

PNB President and Chief Executive Officer Jose Arnulfo A. Veloso said yesterday that the proceeds of the capital raising activity will be used to support its long-term funding.

“[The important thing here is] we’ll take a look into our fund, and we don’t want our funding to only be short-term. We also want to have a long-term funding profile in the domestic currency,” Mr. Veloso told reporters Wednesday.

Mr. Veloso previously said the LTNCD issuance is a “strategic exercise” for PNB as it continues expanding its loan portfolio.

“Raising long-term funding at attractive levels offers our investors an opportunity to support our goals, while allowing us to also provide cost-competitive loans to our clients who would like to grow alongside our strong Philippine economy,” he said in a Feb. 21 disclosure to the local bourse.

Last month, the bank announced its plan to raise as much as P100 billion in fresh funds through a series of bond offerings this year following the approval of the creation of a peso bond and commercial paper program.

This follows the $300 million which PNB raised through medium-term notes in April 2018.

Global banks HSBC and ING Bank N.V. were tapped as joint lead arrangers for the transaction. They also acted as selling agents alongside PNB, First Metro Investment Corp. and the Multinational Investment Bancorporation.

PNB’s listing brings the total volume of outstanding securities listed at the PDEx to P1.104 trillion, floated by 50 companies.

This also brings the total volume of outstanding instruments issued by banks to P370.31 billion.

PNB, the fifth-largest universal bank in the country in asset terms, booked a P7.5-billion net income in the nine months ending September, 67% higher from the a comparable period in 2017. Total loans were at P550.7 billion at end-September, while deposits stood at P692.8 billion.

Shares in PNB closed at P51.30 apiece on Wednesday, climbing 15 centavos or 0.29% from its previous close. —