BDO’s P11.8-B offering sets new record

BDO Unibank raised P11.8 billion through a recent offering that set a new record as the single biggest issuance of high-yielding deposit notes by a local bank.

The issuance of long-term negotiable certificates of deposit (LTNCDs) was upsized by more than twice the original offer of P5 billion given strong demand from both retail and institutional investors, reflecting robust domestic liquidity.

In a statement, BDO thanked clients and the investing public for their confidence in the bank and support for this record LTNCD issuance.

This latest tranche of LTNCDs has a term of five and a half years with the interest rate set at 3.625 percent per year. The issue date is slated for Aug. 18, 2017, while the maturity date will be Feb. 18, 2023.

“The LTNCD issuance is part of the bank’s efforts to diversify the maturity profile of its funding sources and support business expansion plans,” BDO said.

LTNCDs are time deposits with longer maturity and that carry higher yields. While they cannot be pre-terminated unlike regular time deposits, they are negotiable so they can be sold in the secondary market to other investors. Interest income on these LTNCDs is tax-free if held for at least five years. They are also covered by deposit insurance up to a maximum of P500,000 per depositor.

Deutsche Bank AG and ING Bank N. V. acted as the joint lead arrangers and selling agents for the issue, while BDO and BDO Private Bank were the other selling agents. —DORIS DUMLAO-ABADILLA