BDO raises P7.5 B from LTNCD offer

MANILA, Philippines - BDO Unibank Inc. has raised P7.5 billion from its offering of long term negotiable certificates of deposits (LTNCDs).

In a statement, the bank said it has closed the offer period for the LTNCDs, with an initial size of P5 billion.

“With more than two times oversubscription following strong demand from both retail and institutional investors, the offer was upsized to P7.5 billion,” BDO said.

BDO’s issuance has a tenor of 5.5 years with a final interest rate of 3.75 percent per annum. The issue date for the LTNCDs is April 6, while the maturity date is Oct. 6, 2020.

The bank added the papers carry tax exemption on interest income for individual investors if held for at least five years, quarterly interest payments, deposit insurance coverage up to a maximum of P500,000 per depositor, and negotiability subject to conditions.

“The LTNCD issuance is intended to lengthen the maturity profile of the bank’s funding sources as well as support its medium-term growth plans,” BDO said.

ING Bank in Manila and Standard Chartered Bank have been tapped as joint lead arrangers and selling agents for the issue. BDO and BDO Private Bank, meanwhile, were the other selling agents for the transaction.

LTNCDs are negotiable certificates of deposit with a designated maturity, and represent a bank’s obligation to pay the face value upon maturity, with periodic coupon or interest payments during the life of the deposit.

BDO last year saw its net income rise to a record P22.8 billion, while its customer loan portfolio expanded by 20 percent to P1.1 trillion during the period.