BDO upsizes LTNCD volume to P8.2 B

Listed BDO Unibank Inc. has raised P8.2 billion as it tapped the onshore market for the first time this year ahead of the impending interest rate hike by the Bangko Sentral ng Pilipinas (BSP).

The amount raised from the issuance of long term negotiable certificates of deposits (LTNCDs) was higher than the original volume of P5 billion being eyed by the bank.

BDO saw strong demand from both retail and institutional investors, resulting in total subscriptions of P12.3 billion or 2.5 times the original offer.

The bank shortened the offer period by two days. The debt instrument issued by the bank has a term of five and a half years with interest rate set at 4.375 percent per annum.

“The LTNCD issuance is part of the bank’s efforts to lengthen the maturity of its funding sources and support business expansion plans,” BDO said.

LTNCDs offer higher interest rates but cannot be preterminated like regular time deposits.

Deutsche Bank AG Manila Branch and ING Bank N V Manila Branch are the joint lead arrangers and selling agents for the issue, while BDO and BDO Private Bank are the other selling agents.

BDO last issued P11.8 billion worth of LTNCDs in August.

The Sy-led bank sees its net income growing 10.3 percent to a record high of P31 billion this year from P28.1 billion last year as the industry is seen benefitting from higher interest rates due to rising inflationary pressures.

The banking sector is set to benefit from the additional disposable income due to Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Law as well as the Build Build Build program wherein P8.4 trillion has been allocated for major infrastructure projects.