China Bank offers P5B high-yielding deposits

Sy family-led China Banking Corp. has launched a P5 billion offering of high-yielding deposit notes to support expansion plans.

This represents the first tranche of a P20-billion fund-raising from the sale of long-term negotiable certificates of time deposits (LTNCD) to support its strategic initiatives and business growth, following the recent approval of the Bangko Sentral ng Pilipinas (BSP).

The public offer period for the first tranche, which will have a maturity of five years and six months, will run from Nov. 7 until Nov. 11 this year.

“This new issuance is expected to expand the bank’s long-term deposit base and boost its long-term asset growth,” the bank said.

The transaction marks the return of China Bank to the peso debt market after its successful initial LTNCD transaction in 2008, when it successfully offered its five-year P5 billion issue which was
oversubscribed only two days into its offering period.

China Bank and the joint lead arrangers retain the option of adjusting the offer period as it deems necessary. Australia and New Zealand Banking Group Ltd (ANZ), The Hongkong and Shanghai Banking Corp. Ltd. (HSBC) and Standard Chartered Bank (SCB) have been appointed joint lead arranger, joint book runner and selling agents for the transaction. China Bank, China Bank Capital Corp. and Multinational Investment Bancorporation (MIB) will also serve as selling agents for the offering.

Under the BSP’s approval, China Bank will be able to issue multiple tranches of LTNCDs with tenors ranging between 5 to 10 years. The LTNCDs will be offered at a rate of 3.25 percent per annum, payable quarterly.

The minimum investment size is set at P50,000 with increments of P50,000 thereafter.

LTNCDs are time deposits that have longer maturity and are higher yielding than regular deposits. These instruments are negotiable and insured with the Philippine Deposit Insurance Corp. up to a maximum coverage which is currently at P500,000 per depositor.

The instrument be listed on the Philippine Dealing and Exchange Corporation (PDEx) platform.