BPI aims to raise P5B via deposit notes offering

Ayala-led Bank of the Philippine Islands is raising at least P5 billion from an offering of high-yielding deposit notes to support expansion plans and diversify funding sources.

BPI launched on Friday the first tranche of its long-term negotiable certificates of time deposit (LTNCTDs) with a tenor of five and a half years and an indicative interest rate of 3.625 percent to 3.75 percent per annum, the bank disclosed to the Philippine Stock Exchange on Friday.

This is part of a P30-billion LTNCD issuance recently approved by the Bangko Sentral ng Pilipinas, which can be issued in one or more tranches within one year.

“We continue to diversify our funding sources as we cater to the changing financial needs of our clients,” said Cezar Consing, BPI president and chief executive officer.

“This is our second time to offer LTNCTDs. The first in 2007 was a huge success and we are confident that with the attractive yield, relative safety, and flexibility of the LTNCTDs, we will have the same success with our latest offer.”

The offer period for the first tranche of LTNCTDs started on Friday (Oct. 27) and will run until Nov. 16, 2017. The issue and listing dates are set for November 24, 2017.

The final interest rate will be set prior to the end of the offer period. Interest on the LTNCTDs will be paid quarterly.

The minimum investment amount is set at P100,000, with increments of P50,000 thereafter.

ING Bank N.V., Manila Branch, was tapped as the sole arranger of this deal and also acts as selling agent together with BPI Capital Corp. and BPI.

LTNCTDs are negotiable certificates of time deposit issued by banks, with a minimum maturity of five years and denominated in Philippine peso. They usually have higher yields compared to regular time deposits or savings accounts.

Unlike regular time deposits, LTNCTDs cannot be pre-terminated by holders. However, investors can negotiate or transfer their holdings in the secondary market prior to maturity. Interest on LTNCTDs is tax-free for individual investors if the instrument is in the name of the individual holder and is held for at least five years.

These instruments are insured with Philippine Deposit Insurance Corp. subject to applicable rules and regulations on maximum insurance coverage.