MANILA, Philippines - Allied Banking Corp. has issued long-term negotiable certificates of deposit (LTNCD) worth P3.5 billion with a fixed rate of seven percent payable quarterly until 2014.
“This issue was priced at a spread of approximately 60 basis points above the five-year PDST-F benchmark,” it said in a report.
Joint arrangers for the issue were ING Bank NV and Deutsche Bank AG Manila, with the Philippine National Bank (PNB) as selling agent.
Bank officials said the money to be raised from the LTCD will be used to raise the bank’s liquidity for future lending.
The LTNCDs are senior obligations and are tax-exempt for individuals as long term as the LTNCDs are held until maturity. The long term papers are negotiable and transferable to the secondary market through a market maker, and are covered by the Philippine Deposit Insurance Corp. (PDIC) “up to specified limits.
Early last year, Allied Bank raised P4.5 billion in subordinated notes to strengthen its capital base, expand its loan portfolio and fund its expansion and rationalization programs.
The notes issue was rated Ba3 by Moody’s Investor Service based on the bank’s strong niche in middle-market business, progress on the disposals of non-performing assets (NPAs), and profit growth.
The notes carried a coupon rate of between 6.875 percent and 7.375 percent per annum for the first five years, with the final rate to be determined at the end of the offer period. ING Bank NV, Manila branch was the lead manager and sole bookrunner.
Allied Bank and the Philippine National Bank (PNB) are in the process of integration, after the board of directors of both banks decided on a merger plan last year. Both are part of the Lucio Tan Group of Companies.
The integration process begun last year with the automated teller machine (ATM) systems of both banks allowing each bank’s clients to use either bank’s ATM network free of charge. This despite the fact that PNB and Allied Bank are on separate ATM networks.
Allied Bank has a domestic branch network of 283 branches.
It has two foreign branches in Guam and Bahrain and foreign subsidiaries in London, Xiamen and Hong Kong.