Union Bank lists deposit notes on PDEx

Aboitiz-led Union Bank of the Philippines debuted on the local fixed income platform Philippine Dealing Exchange Corp. (PDEx) yesterday, raising P3 billion from the issuance of high-yielding deposit notes.

The long-term negotiable certificates of time deposits (LTNCDs) carrying a tenor of five years and six months were priced to yield 4.375 percent a year. This is aimed at improving its deposit maturity profile and support expansion plans.

The listing of the LTNCDs yesterday marked were the first instrument issued by Union Bank to be listed on this platform and the first listing of securities on PDEx for the year.

Standard Chartered Bank was the sole lead arranger and bookrunner for the issuance. It also served as a selling agent, with UnionBank and Multinational Investment Bancorp.

This is the first tranche of the P20-billion LTNCDs approved by the Bangko Sentral ng Pilipinas for issuance by Union Bank.

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