East West to issue P15-B IOUs
Gotianun-led East West Bank is raising as much as P15 billion from an offering of high-yielding deposit notes to diversify funding sources as part of its overall liability management.
In a disclosure to the Philippine Stock Exchange, East West said its board had approved the offering of long-term negotiable certificates of time deposits (LTNCTDs).
“We just want the program approved and typically we will have one year to issue,” East West vice chair and chief executive Antonio Moncupa Jr. said.
LTNCTDs are negotiable certificates of time deposit issued by banks, with a minimum maturity of five years and denominated in peso. These have higher yields compared to regular time deposits or savings accounts.
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 is held for at least five years.
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