BDO, Security bank complete high-yielding deposit notes offering

Two of the country’s largest lenders, BDO Unibank and Security Bank, have completed their fresh fund-raising activities.

In separate disclosures to the Philippine Stock Exchange on Monday, BDO said it had completed its P6.5-billion long-term negotiable certificates of time deposit (LTNCD) offering while Security Bank said it had raised P6.06 billion from the same instrument.

LTNCDs carry 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.

BDO said its offering was upsized from the original offer of P5 billion, citing strong demand from mostly retail investors. This latest tranche of LTNCDs has a term of five and a half years with a final interest rate of 4 percent a year. The issue date is Sept. 27, 2019, while maturity is on March 27, 2025.

ING Bank Manila branch served as the sole arranger and selling agent for the issue, while BDO and BDO Private Bank were selling agents.

Security Bank’s latest LTNCD foray marked the second time the bank has tapped the debt capital markets this year.

The bank also noted solid demand from both retail and institutional investors, resulting in subscriptions reaching P6.06 billion versus the base offer of P5 billion.

The LTNCDs were likewise priced to yield 4 percent a year for a tenor of five and a half years.

This drawdown marks the first tranche of Security Bank’s P20-billion LTNCD approval from the Bangko Sentral ng Pilipinas.

The issue date was Sept. 23, 2019 while maturity will be on March 23, 2025.

Deutsche Bank Manila branch was the sole lead arranger and selling agent, assisted by Security Bank.