PSBank starts P15-B LTNCD offer

Philippine Savings Bank (PSBank) is initially raising at least P3 billion in the first tranche of its fund raising activity after getting the approval of the Bangko Sentral ng Pilipinas (BSP) for its P15-billion long-term negotiable certificates of time deposits (LTNCDs) offering.

PSBank president Jose Vicente Alde said the bank started to offer yesterday until Aug. 2 the debt instrument with a tenor of five years and six months as well as an interest rate of five percent per annum.

The bank has tapped ING Bank and Standard Chartered Bank as joint arrangers and bookrunners, as well as First Metro Investments Corp. and Metropolitan Bank & Trust Co. as selling agents.

Alde earlier said the issuance of LTNCDs would give PSBank an opportunitiy to access long-term funding as the bank further expands its consumer banking business.

The country’s second largest thrift bank in terms of assets last issued LTNCDs worth P3.375 billion in January 2017. It launched a P10-billion LTNCD offering in September 2016.

PSBank is the thrift banking arm of Metrobank. It currently has 250 branches and more than 600 ATMs nationwide.

Earlier, Metrobank received the green light from the BSP to raise as much as P25 billion from the issuance of LTNCDs.

Metrobank is set to issue the LTNCDs with a tenor of between 5.5 and 10 years in one or more tranches of at least P2 billion per tranche to be listed on the Philippine Dealing and Exchange Corp. (PDEx).

The planned fund raising activity in the onshore market aims to diversify the maturity profile of funding sources and support business expansion plans of the Ty-led bank.

LTNCDs have been an effective way for banks to raise cost-effective funding, while offering a new investment product to their own deposit base, most of whom are looking for long term assets that provide higher yields than traditional time deposits.