Banco de Oro raises offer size of 5-yr notes to P2.1B

Banco de Oro Universal Bank, the banking unit of the SM Group of retail tycoon Henry Sy, has raised the offer size of its five-year long-term negotiable certificates of time deposits (LTNCD) to P2.1 billion from P1.5 billion due to strong investor demand.

LTNCDs are direct obligations and indebtedness of a bank that carry insurance from the Philippine Deposit Insurance Corp. (PDIC). As a bond deposit, these can be traded in the secondary market.

BDO’s LTNCDs carry an interest rate 25 basis points above the yield on 91-day Treasury bills as quoted on the MART1 series of indices.

BDO said its LTNCD is structured as a floating-rate instrument and can be negotiated at prices posted daily by the Hongkong & Shanghai Banking Corp., the sole bookrunner and market-maker for the issue.

"It has always been BDO’s goal to come up with viable investment instruments to mobilize savings and encourage long-term investment among retail and corporate customers," BDO president Nestor Tan said.

In issuing the LTNCD, BDO said it is raising stable and long-term funding to support its overall growth strategy, as well as providing alternative investment instruments to diversify its portfolios.

BDO’s debt paper is part of a program to issue negotiable certificates of time deposits worth at least P5 billion, depending on demand.

BDO is eyeing between 20 -percent to 25-percent increase in its net profit this year toas much as P2.5 billion, mainly driven by recent acquisitions.

The bank recently acquired the local branches of Singapore’s United Overseas Bank Ltd. for P600 million.

BDO has likewise renewed its interest to buy into Equitable PCI Bank, the country’s third largest bank.