UCPB prices P3-billion notes at 6.25%

MANILA, Philippines - United Coconut Planters Bank (UCPB) has priced its P3-billion long-term negotiable certificates of deposit (LTNCD) at a fixed rate of 6.25 percent per annum quarterly over the next five years and three months, or until February 2016, the bank said in a statement.

The offer period will run from Nov. 12 to 19 this year. Since the primary target are retail investors, the bank will be issuing the LTNCD in minimum denominations of P50,000, with additional investments in multiples of P1,000.

Sale will be done through the bank’s 178 branches nationwide and through the offices of the two other selling agents, Multinational Investment Bancorporation, and Citicorp Financial Services and Insurance Brokerage Philippines.

UCPB executive vice president and treasurer Eulogio Catabran said the yield will make the investment attractive to investors, particularly to individuals, since they are additionally exempted from paying the 20-percent income tax on investments with tenor of five years or more.

Catabran said UCPB and issue arranger, Citicorp Capital Philippines Inc. held an investor road show yesterday in Metro Manila to drum up interest in the long-term deposit offering.

LTNCDs are like time deposits but have longer maturities of five years or more and cannot be pre-terminated. However, being negotiable, they can be sold to other investors and used as collaterals for loans.

Catabran said the issuance of LTNCD will increase UCPB’s deposit base and allow the bank to accelerate lending to middle market companies and consumers.

The medium-sized commercial bank has been growing its deposits and loans by double-digits in the past two-and-a-half years to drive earnings growth.

Its deposits went up 21 percent in 2008 and by another 38 percent in 2009.   During the same period, loans expanded by 33 percent and 21 percent, respectively.

In the first six months of the 2010, deposits rose 12 percent while loans grew 20 percent year-on-year.

The loan expansion boosted UCPB’s total interest income by 29 percent year-on-year in the first half of the year, lifting profits as of June this year to P1.306 billion.

As of June 30, UCPB ranks 10th in total deposits with P138 billion, 13th in total loans with P58 billion and 12th in total assets with P170 billion.