PNB offers P5B in high-yielding notes

PHILIPPINE National Bank, tycoon Lucio Tan’s banking arm, yesterday launched the offering of high-yielding long-term certificates of deposits worth as much as P5 billion.

The long-term negotiable certificates of deposits (LTNCDs), with a maturity of five and a half years, were priced at 3 percent per year—the low end of the 3 to 3.25 percent indicative range.

The notes will be available to the investing public from July 25 to 29, PNB said in a statement. At the bank’s discretion, the offer period may be closed earlier than July 29.

PNB said this offering was part of efforts “to support the bank’s business expansion plans, and shore up its source of longer term funding.”

LTNCDs are negotiable certificates of time deposit with a designated maturity or tenor representing a bank’s obligation to pay the face value upon maturity and make periodic coupon or interest payments during the life of the deposit. These deposits, up to P500,000 per depositor, are covered by deposit insurance under Philippine Deposit Insurance Corp.

Interest is paid quarterly, and is taxexempt if held for at least five years. The minimum denomination of the LTNCD is P500,000 with additional in- vestments of P100,000 thereafter.

PNB mandated the Hongkong and Shanghai Banking Corp. Ltd. as the sole lead arranger and bookrunner for the offering. It is also a selling agent together with PNB, First Metro Investment Corp. and Multinational Investment Bancorporation.

The bank merged with Allied Banking Corp., which is also controlled by the Lucio Tan group, via a share swap deal on Feb. 9. With PNB as the surviving entity, the merger created a bigger bank with increased branch network and a more diversified client base.