BDO raises P5B from sale of 7-year deposit paper

The country’s biggest lender Banco de Oro Unibank has completed a P5-billion fund-raising from the offering of seven-year deposits at a coupon rate of 3.5 percent a year.

In a disclosure to the Philippine Stock Exchange Monday, BDO said its offering of long-term negotiable certificates of deposits (LTNCDs) ended on Aug. 30 and was “oversubscribed by a good mix of retail and institutional investors.”

LTNCDs are negotiable certificates of time deposit with a designated maturity or tenor representing a bank’s obligation to pay the face value upon maturity as well as make periodic coupon or interest payments during the life of the deposit. These deposits are insured by the state-owned Philippine Deposit Insurance Corp. up to a maximum of P500,000 per depositor.

Interest in BDO’s LTNCDs will be paid quarterly and tax exempt for individual investors if held for at least five years. The issue date is Sept. 12.

“The LTNCDs will support the bank’s growth objectives and help lengthen the maturity profile of its funding sources,” the bank said.

Standard Chartered Bank and ING Bank N.V. Manila Branch acted as joint lead arrangers, selling agents and market makers for the LTNCD, while BDO and BDO Private Bank were the other selling agents.

BDO is a full-service universal bank which provides a wide range of corporate, commercial and retail banking services. These services include traditional loan and deposit products, as well as treasury, trust banking, investment banking, private banking, cash management, leasing and finance, remittance, insurance, retail cash cards and credit card services.

BDO is the country’s largest bank in terms of assets, loans, deposits, capital and trust funds under management based on published statements of condition as of end-June.

BDO has one of the widest distribution networks, with more than 790 operating branches and over 2,100 ATMs nationwide. It also has a branch in Hong Kong as well as 14 remittance and representative offices in Asia, Europe, North America and the Middle East.