BDO offers P5B worth of high-yielding deposit notes

The country’s leading lender, BDO Unibank, rolled out on Wednesday at least P5 billion worth of high-yielding deposits as it sought to lengthen the maturity of its funding sources and support expansion plans.

The long-term negotiable certificates of deposits (LTNCDs) will have a term of five and a half years with an indicative pricing of 5.125-5.50 percent a year, BDO told the Philippine Stock Exchange on Wednesday.

BDO can still increase the issue size, depending on market demand.

This marks BDO’s return to the LTNCD market after a year. It last issued P8.2 billion worth of LTNCDs in May last year.

The final coupon rate will be set prior to or at the end of the offer period, which will run from March 27 to April 5. The bank can adjust the timing of the offer.

Interest will be paid quarterly. The minimum investment is P100,000, and in increments of P50,000.

The issue date is set for April 12, 2019.

LTNCDs are negotiable certificates of deposit with a designated maturity. They represent a bank’s obligation to pay the face value upon maturity, with periodic coupon or interest payments during the life of the deposit.

LTNCDs can be an attractive investment especially for individuals, as interest income is exempted from withholding taxes if the LTNCDs are held for at least five years. LTNCDs are also covered by Philippine Deposit Insurance Corp.

Deutsche Bank AG’s Manila Branch is the sole lead arranger and selling agent, while BDO and BDO Private Bank are the other selling agents. BDO Capital and Investment Corp. serves as BDO’s financial adviser.

BDO has assets of more than P3 trillion. Last year, it posted a record-high net profit of P32.7 billion, outperforming its full-year goal despite a challenging macroeconomic environment.