BPI raises record P12.24-B LTNCTD

Ayala-led Bank of the Philippine Islands (BPI) raised a record P12.24 billion from the first tranche of its P30 billion long-term negotiable certificates of time deposit (LTNCTD) program.

BPI president and CEO Cezar Cons- ing said in his opening remarks during the bank’s maiden listing at the Philippine Dealing and Exchange Corp. (PDEx) the transaction was the largest single LTNCTD issuance to date.

Consing said the fund raising exercise was met with strong demand reflecting the confidence of investors in the country’s oldest and third largest bank, prompting it to upsize the initial offering of P5 billion.

“I think this is a wonderful benchmark, I am personally hoping that this benchmark will be surpassed in the not so distant future,” he said.

The fund raising exercise exceeded the previous record of P11.8 billion raised by BDO Unibank Inc., according to Consing.

“This is the largest and while it is benchmark, I am hoping that it doesn’t stay the largest for long because we all want progress, we want bigger issues to follow this,” he said.

LTNCTDs are peso-denominated certificates of time deposit with a minimum maturity of five years and are negotiable in the secondary market.

This was the first instrument listed by BPI in the fixed income exchange allowing investors to negotiate the LTNCTDs in the secondary market.

“We have an option of doing more. So if the opportunity presents itself and there is a need then we will do more but we haven’t made that decision yet,” Consing replied about the timetable for the issuance of the remaining balance of the LTNCTD program.

In addition to supporting the BPI’s expansion plans, the issuance would diversify the bank’s funding sources while offering investors an attractive investment instrument.

Consing said portion of the proceeds of the LTNCTD issuance would also be used to partially fund the government’s massive infrastructure program wherein about P8 trillion worth of infrastructure projects would be undertaken until 2022.

“We are hoping that at least some of the proceeds of this will go to the government infrastructure projects. The fact is if you look at the capital needs that are in the economic plans of the government. They are so large and they are so significant that frankly all banks will have to pitch in,” he said.