PNB’s P3-B LTNCD offer generates strong demand

MANILA, Philippines - Philippine National Bank’s P3 billion worth of long-term negotiable certificates of time deposit (LTNCDs) has received huge volume of orders, forcing the bank to consider expanding its offer.

In a report, PNB said it would continue to receive orders until Dec. 5 and will issue the LTNCDs seven days later.

The bank has also priced the 5.5-year instrument at 4.125 percent.

The P3-billion issue is the first tranche of the bank’s P10-billion LTNCD program, approved by the Monetary Board of the Bangko Sentral ng Pilipinas (BSP).

“Proceeds from the offering will support business expansion plans, and provide the bank with a longer term source of funding, which it can use to match its assets,” PNB said.

LTNCDs are negotiable certificates of deposit with a designated maturity or tenor, representing a bank’s obligation to pay the face value upon maturity, as well as periodic coupon or interest payments during the life of the deposit. LTNCDs are covered by deposit insurance with the Philippine Deposit Insurance Corp. (PDIC) up to a maximum amount of P500,000 per depositor.

The interest will be paid quarterly, and will be tax exempt for qualified individuals, if they are held for at least five years. The minimum denomination is P500,000, with increments P50,000.

Hongkong and Shanghai Banking Corp. Ltd. (HSBC) is the sole lead arranger and bookrunner, and is also a selling agent together with PNB, First Metro Investment Corp. and Multinational Investment Bancorporation.