BPI kicks off LTNCD offer
Ayala-led Bank of the Philippine Islands (BPI) is raising at least P5 billion from the first tranche of its long-term negotiable certificates of time deposit offering.
BPI president and CEO Cezar Consing said proceeds from the sale would be used to support the bank’s expansion plans and diversify its funding sources.
“We continue to diversify our funding sources as we cater to the changing financial needs of our clients,” he said.
The country’s third largest bank is looking to raise P30 billion from the issuance of LTNCDs.
The offer period for the first tranche kicked off last Friday and will end Nov. 16.
With a tenor of five and a half years and an indicative interest rate of 3.625 to 3.75 percent per annum, the debt securities will be listed on the Philippine Dealing and Exchange Corp. on Nov. 24.
The final interest rate will be set prior to the end of the offer period. Interest on the LTNCDs will be paid quarterly.
ING Bank Manila Branch was tapped as the sole arranger of this deal. It also acts as selling agent together with BPI Capital Corp. and BPI.
This marks BPI’s return to the debt market since the listing of P5 billion worth of LTNCDs in May 2007.
“This is our second time to offer LTNCDs. The first in 2007 was a huge success and we are confident that with the attractive yield, relative safety, and flexibility of the LTNCDs, we will have the same success with our latest offer,” Consing said.
LTNCDs are negotiable certificates of deposit with a designated maturity, and represent a bank’s obligation to pay the face value upon maturity, with periodic coupon or interest payments during the life of the deposit.
Interest income is exempt from withholding taxes if the LTNCDs are held for at least five years.
Big banks have so far raised more than P52 billion from the issuance of LTNCDs that were listed at the PDEX.
Other banks that have sold LTNCDs include Security Bank Corp., Philippine National Bank of tobacco and airline magnate Lucio Tan and Aboitiz-led Union Bank of the Philippines.