RCBC to issue new negotiable certificates of time deposit

SCREENGRAB from www.rcbc.com

MANILA, Philippines—Rizal Commercial Banking Corp. plans to raise as much as P5 billion in fresh funds for expansion from an offering of high-yielding negotiable certificates of time deposit by the fourth quarter of this year.

RCBC has obtained board approval to issue peso-denominated long term negotiable certificates of time deposit (LTNCDs) subject to prevailing market conditions and Bangko Sentral ng Pilipinas approval, the bank told the Philippine Stock Exchange on Wednesday.

The size of the offering, which will be done through a private placement, will be about P5 billion in seven- or 10-year tenors, RCBC executive vice president and head of strategic initiatives John Thomas Deveras said in a text message.

The issuance may likely take place in the fourth quarter, he said.

LTNCDs are negotiable certificates of time deposits and are tax exempt for qualified individuals if held for at least five years. The LTNCDs are insured by the Philippine Deposit Insurance Corp. (PDIC) up to maximum coverage per depositor, currently at P500,000. These are bank products with long tenors, usually five to 10 years, which are offered to investors looking for a higher interest rates compared to regular savings accounts or shorter-term deposits.

RCBC is also raising another P3 billion from a new offering of debt notes qualifying as Tier 2 or supplementary capital. Earlier this week, the bank announced the reopening of its 5.375 percent per annum tier 2 notes due 2024, thereby using up the leeway given by the BSP for the bank to raise as much as P10 billion from this instrument.

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