PNB gets nod to issue P5 B in new negotiable certificates of long-term deposit

MANILA, Philippines—Philippine National Bank launched on Wednesday a new offering of negotiable certificates of long-term deposit after receiving regulatory authority to raise as much as P5 billion from these instruments.

In a disclosure to the Philippine Stock Exchange, PNB said it had received authority from the Bangko Sentral ng Pilipinas to issue long-term negotiable certificates of deposits. The offering started on Wednesday and will run until Oct. 16.

“Approval is for P5 billion but we will issue for a smaller amount at the interest rate we like to pay,” PNB president Omar Mier said in a text message.

“Purpose is to fund some of our long term fixed-rate loans, so we will issue only what we need, which will be lower than P5 billion,” he added.

PNB has the discretion to close the offer period earlier.

HSBC acts as sole lead arranger and bookrunner and as selling agent for the transaction. Other selling agents are First Metro Investment Corp. and Multinational Investment Bancorporation.

Similar to recent negotiable certificates of deposit issued by PNB, the new tranche will have a maturity of five-and-a-half years. The indicative pricing will be within the 3.0-3.25 percent range.

Interest is paid quarterly and is tax-exempt for qualified individuals if held for at least five years.

The minimum denomination of the LTNCDs is P500,000 with increments of P100,000 thereafter.

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 covered with deposit insurance with the Philippine Deposit Insurance Corporation up to a maximum of P500,000 per depositor.