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PNB to issue up to P20B in high-yield debt notes

/ 05:24 AM January 24, 2018

Tycoon Lucio Tan-led Philippine National Bank is raising as much as P20 billion from the issuance of high-yield deposit notes, harnessing ample liquidity in the local financial system for its debt management and expansion program.

PNB has obtained approval from its board to issue the long-term negotiable certificates of time deposit (LTNCTDs) in one or more tranches, subject to the approval of the Bangko Sentral ng Pilipinas (BSP).

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“The proceeds will be used to extend the maturity profile of the bank’s liabilities as part of overall liability management, support compliance with required BSP liquidity ratios and raise long-term-funds for general corporate purposes,” PNB said.

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.

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Unlike regular time deposits, LTNCTDs cannot be preterminated 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 held for at least five years.

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TAGS: debt management and expansion program, high-yield debt notes, Lucio Tan, Philippine National Bank
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