BPI raises P12.2B from offering of high-yield term deposits
Ayala-led Bank of the Philippine Islands has raised P12.2 billion from a landmark offering of high-yielding term deposits, so far the single largest issuance of such an instrument in the local banking system.
BPI’s long-term negotiable certificates of time deposit (LTNCTDs) have a tenor of five and a half years maturing in 2023 and an interest rate of 3.75 percent a year payable quarterly.
The issue was met with strong demand, prompting the bank to upsize from its initial offering of P5 billion to P12.2 billion, the bank disclosed to the Philippine Stock Exchange on Friday.
On Friday, the LTNCTDs were listed on the Philippine Dealing Exchange Corp. (PDEx), marking the first instrument listed by BPI in the fixed-income exchange.
The listing allows investors to negotiate the instrument in the secondary market.
“This reflects the confidence of investors in BPI,” bank president Cezar Consing said in a press statement on Friday. “The success of this offer will help us in our expansion plans as we continue to focus on shareholder value by pursuing sustainable growth and profitability.”
LTNCTDs are peso-denominated certificates of time deposit with a minimum maturity of five years and are negotiable in the secondary market. Historically, LTNCTDs offer higher interest rates than regular deposits.
LTNCTDs are also insured with the Philippine Deposit Insurance Corp. subject to applicable rules and regulations on maximum insurance coverage.
This issuance is the first tranche of the P30-billion LTNCTD issuance program approved by the Bangko Sentral ng Pilipinas (BSP) for BPI.
In addition to supporting the BPI’s expansion plans, the issuance is seen to diversify the bank’s funding sources while offering investors an attractive investment instrument.
ING Bank N.V., Manila branch, acted as the sole arranger for this issue and also acted as selling agent together with BPI Capital Corp. and BPI.
This is the second time for BPI to tap the LTNCTD market after its debut in 2007. —DORIS DUMLAO-ABADILLA
