PNB, Security Bank eye debt notes offering to raise funds

Two big banks—Philippine National Bank and Security Bank Corp.—are set to tap the local financial market with an offering of high-yielding deposit notes.

In a disclosure to the Philippine Stock Exchange yesterday, PNB said it was offering at least P3 billion worth of long-term negotiable certificates of deposits (LTNCDs) with a tenor of at least five years at an indicative interest rate of 3.75 percent to 3.875 percent payable quarterly.
Security Bank, in a separate disclosure, said it had obtained approval from the Bangko Sentral ng Pilipinas (BSP) to raise as much as P20 billion from an offering of LTNCDs. The first tranche of the offering is set for October, depending on prevailing market conditions.

In the case of PNB, this is the third tranche of offering under its planned P20-billion LTNCD issuance approved by the BSP in October 2016. Offering period runs from Oct. 11 to 19.

PNB has mandated Hongkong and Shanghai Banking Corp. Ltd. and ING Bank N.V. Manila as joint lead arrangers and bookrunners for the issuance. The selling agents are PNB, HSBC, ING and Multinational Investment Bancorp. PNB Capital and Investment Corp. is the financial adviser for this offering.

LTNCDs are negotiable certificates of time deposits and are tax exempt for qualified individuals if held for at least five years. They are insured by Philippine Deposit Insurance Corp. (PDIC) up to a maximum coverage per depositor of P500,000. LTNCDs are bank products with long tenors, usually five to 10 years, which are offered to investors looking for a higher interest rate compared to regular savings accounts or shorter-term deposits.

PNB said its LTNCDs would be listed for trading through the facilities of Philippine Dealing and Exchange Corp. Its LTNCDs will be issued on Oct. 26 while maturity date is April 26, 2023.

Security Bank’s offering will mark its return to the LTNCD market after its last issuance in 2014.