Landbank to raise P5B via note sale

The Land Bank of the Philippines plans to raise up to P5 billion in deposits from the sale of medium-term high-yield certificates from local investors, taking advantage of the availability of ample liquidity to lock in more stable funds to support loan growth.

In a notice, Landbank said the offer period for its issuance of Long-Term Negotiable Certificates of Time Deposit (LTNCD) started on Monday and would go on until the 25th of the month, or until all the securities are sold.

The LTNCDs have a maturity of five and a half years from the issue date, which was set on Nov. 5. The deposit instruments will pay out 3.125 to 3.5 percent, with investors getting interest payments every quarter.

Lead arrangers, bookrunners, and selling agents for the issue were foreign financial institutions, namely, Deutsche Bank, HSBC and ING Bank. Other selling agents were First Metro Investments Corp., Landbank, and Multinational Investment Bancorportation.

The LTNCDs will sell at a minimum lot of P50,000, which can be increased at P10,000 increments.

A similar LTNCD issuance by Landbank—sold mainly to overseas Filipino workers and their relatives—that matures next month had a payout of 7 percent.

In August, Landbank reported a 49-percent jump in profits to P8.5 billion for the first half of the year, exceeding the state-run lender’s target for the six-month period by 62 percent.

Landbank is the latest in a growing list of lenders that have raised loanable funds through the sale of LTNCDs this year.

Gotianun-led Eastwest Banking Corp. earlier said it planned to raise P5 billion in LTNCDs that also mature in five and a half years.

Last month, the Aboitiz family’s Unionbank of the Philippines launched a similar offering, taking advantage of the country’s highly liquid market. The Rizal Commercial Banking Corp. (RCBC) did the same last September.

Earlier, the Bangko Sentral ng Pilipinas said it expected fund-raising activities of local banks to pick up due to the availability of ample liquidity that has been driving the country’s booming economy.

The country’s money supply grew by 30.9 percent in September—the fastest expansion in a decade—following the exit of recently banned non-pooled funds from the central bank’s special deposit accounts.