Banco de Oro launches P1.5-B LTNCD

After its successful purchase of the United Overseas Bank Limited of Singapore business last week, the Banco de Oro Universal Bank (Banco de Oro or BdO) is focused on raising funds through the issuance of P1.5 billion worth of long-term negotiable certificate of deposit (LTNCD) with five-year plus one-day tenor. Proceeds of the LTNCD will form part of its thrust of diversification of its deposit and maturity profile. But sources believe that it is preparing for another acquisition.

"Its recent transaction with UOB theoretically makes Banco de Oro the second largest in the industry," sources said. It signed an accord with UOB to acquire 66 of the 67 UOB branches in the country under a share-swap agreement, costing about P600 million. Recently, it expressed interest in acquiring 10.8 percent of the total common shares of Equitable PCI Bank held by the EBC Investments. BDO is expected to float some P1.5 billion worth of LTNCD with a greenshoe option of increasing the volume, depending on the market reception. Total license given by the regulators to BDO is P5 billion. The offering date of the BDO issuance started May 9 while issue date is June 2. Citibank, likewise, is in the market to raise P1.5 billion worth of LTNCD, carrying the same tenor of five-year plus one-day, making the debt instrument tax-free. HSBC is the lead manager of the two offerings. While the two institutions have the same underwriter, Banco de Oro’s flotation is through bookbuilding while Citibank is fully underwritten. – TPT