AUB pegs P2-B LTNCD yield at 3.5%

MANILA, Philippines - Asia United Bank (AUB), the banking unit of the Rebisco Group, has pegged the interest rate on its P2-billion long term negotiable certificates of time deposit (LTNCD) offer at 3.5 percent.

This marks AUB’s first LTNCD  issuance, following its P7-billion initial public offering (IPO) earlier this year.

AUB will use the proceeds from the five-year LTNCD offer for general corporate purposes and to further strengthen its banking operations.

Interest on the notes will be paid on a quarterly basis.

The offer period will run from Nov. 25 to Dec. 6 and the issue date will be on Dec. 12.

The LTNCD will be sold on minimum denominations of P100,000, with increments of P10,000.

LTNCDs are negotiable certificates of time deposit insured for up to P500,000 and are tax-exempt for qualified individuals if held for at least five years.

These are bank products with long tenors, usually five to 10 years, which are offered to investors looking for a higher interest rate compared to regular savings accounts or shorter-term deposits.

HSBC is acting as the sole lead arranger, bookrunner, and selling agent for the transaction.

AUB has experienced significant growth in 2013. Its total assets stand at P96.9 billion, total deposits at P69.2 billion, and total capital at 17.9 billion as of September this year.

The bank currently operates 142 branches within the Philippines and expects to expand its branch network to 200 by 2014.