MIB tapped for RCBC deposit notes
Yuchengco-led Rizal Commercial Banking Corp. has tapped Multinational Investment Bancorp. (MIB) as market-maker for its long-term negotiable certificates of deposits (LTNCDs) due in 2019.
This was based on RCBC’s disclosure to the Philippine Stock Exchange Friday.
LTNCDs covered included the P2.86 billion worth of notes carrying 3.25 percent annual fixed rate and another P2.14 billion worth of zero-coupon LTNCDs both due in May 2019.
Effective Friday, RCBC said any secondary trade for the LTNCDs should be coursed through MIB.
A market-maker is a broker-dealer firm that provides liquidity to certain securities at the secondary market by buying or selling those securities. As such, it assumes the risk of holding a certain number of shares of a particular security in order to facilitate its trading.
Regulators require banks to tap market-makers for their LTNCD issuances.
LTNCDs are negotiable certificates of time deposits and are tax exempt for qualified individuals if held for at least five years. LTNCDs are insured by Philippine Deposit Insurance Corp. (PDIC) up to the P500,000 maximum coverage per depositor.
LTNCDs are bank products with long tenors, usually five to 10 years, which are offered to investors looking for higher interest rates compared to regular savings accounts or shorter-term deposits.
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