BDO to issue P5B in debt notes

The country’s leading lender Banco de Oro Unibank is raising up to P5 billion from an offering of high-yield deposits, seeking to lengthen the maturity of funding sources and support its growth objectives.

This latest tranche of BDO’s long-term negotiable certificates of deposits (LTNCDs) will have a term of five and a half years with pricing to be finalized at the end of the offer period, the bank said in a statement Monday.

The last time that the banking arm of the Sy-led SM group offered LTNCDs was in December 2013.

Interest will be paid quarterly in arrears. The minimum investment is P100,000 with increments of P50,000.

The offer period began Monday and will run until March 27, with the issue date set on April 6, 2015. However, the bank reserves the right to adjust the timing of the offer as needed.

BDO has mandated ING Bank N.V. Manila Branch (ING) and Standard Chartered Bank (SCB) as the joint lead arrangers and selling agents for the issue while BDO and BDO Private Bank are the other selling agents.

LTNCDs are time deposits but have longer maturity and carry higher yields. While they cannot be preterminated unlike regular time deposits, they are negotiable so they can be sold in the secondary market to other investors. By using the LTNCD structure, which is tax-free because of the long tenor, banks can offer better yields to clients.

“LTNCDs are an attractive investment especially for individuals, as interest income is exempt from withholding taxes if the LTNCDs are held for at least five years,” BDO said.

These instruments are covered by deposit insurance with the Philippine Deposit Insurance Corp. up to a maximum of P500,000 per depositor. Doris C. Dumlao