East West raises P2.45 B fresh fund via LTNCDs

Gotianun-led East West Banking Corp. returned to the domestic debt market, raising P2.45 billion via the first tranche of its long-term negotiable certificates of time deposits (LTNCDs) offering.

The LTNCDs due 2023 issued by EastWest were listed on the platform of the Philippine Dealing and Exchange Corp. (PDEx) yesterday.

The fund raising activity is part of the plan of EastWest to issue P15 billion worth of LTNCDs under its liability management program.

EastWest vice chairman and chief executive officer Antonio Moncupa said the fund raising activity is aimed at diversifying the bank’s funding sources as part of its overall liability management.

“We have programmed our LTNCD to be issued in several tranches,” Moncupa said.

EastWest completed the issuance of P10 billion worth of LTNCDs in September last year with the listing of the fifth and final tranche on the PDEx platform amounting to P2.63 billion. It raised P1.07 billion from the issuance of LTNCDs in July last year, P2.59 billion in May, and P995.2 million in April.

The bank, founded by the late taipan Andrew Gotianun, raised its authorized capital to P50 billion from P20 billion as part of efforts to sustain its momentum as the fastest growing bank in the Philippines.

This paved the way for the issuance of additional three billion common shares with a par value of P10 per share. The bank also declared a 50 percent stock dividend or 750 million common shares, representing the minimum 25 percent subscribed and fully paid-up subscription.

“EastWest is growing fast. And to sustain the growth momentum, it is pretty obvious that we need to raise capital,” Moncupa 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.