State-run Land Bank of the Philippines (LBP) raised P6 billion from fresh long-term deposits as part of efforts to improve the company’s funding base for sectors in need of more stable financing.
A total of P6 billion in new deposits were raised as a result of an offer made this week. The bank said it originally wanted to raise P3 billion, but officials decided to double the amount of bids it accepted due to strong demand.
In a statement, Landbank said its new time deposits, known as long-term negotiable certificate of deposits (LTNCD), was met with strong demand by investors eager to find new places in which to park their funds.
“The proceeds of the issuance will make long-term funding available for the bank’s development program and lending activities for our mandated and priority sectors,” Landbank president and CEO Gilda Pico said in a statement.
Under the law, Landbank is required to concentrate bulk of its lending to agriculture and infrastructure projects.
Based on its order book, the bank could have raised as much as P7 billion. Based on the approval granted by regulators, the bank can raise P9 billion more.
The strong demand helped Landbank price the securities at the lowest end of its pricing guidance at 3.75 percent per annum. The LTNCDs, which will be issued on October 9, 2015, will mature in five and a half years.
Based on data as of end-June, Landbank is the fourth largest bank in terms of assets, loans and deposits. In the same period, the bank reported a net income of P7.2 billion, 19 percent higher than the same period last year when it made P6.04 billion.
Landbank is the only universal bank present in all of the country’s 81 provinces with a nationwide network of 356 branches and 1,454 money automated tellers.
HSBC acted as the sole lead manager and bookrunner for the transaction. It also acted as the selling agent together with Landbank and Multinational Investment Bancorporation (MIB).