BDO raises P8.2B from term deposit offer

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The country’s largest lender BDO Unibank has raised P8.2 billion from a new offering of high-yielding deposits, improving its funding mix and boosting capability to oil the needs of a growing economy.

The latest tranche of long-term negotiable certificates of deposits (LTNCDs) has a term of five and a half years and an interest rate of 4.375 percent per annum.

In a press statement on Friday, BDO said this LTNCD issuance was “part of the bank’s efforts to lengthen the maturity of its funding sources and support business expansion plans.”

The offering had been upsized from the base offer of P5 billion to accommodate strong demand from both retail and institutional investors. Total subscriptions reached P12.3 billion or almost 2.5 times the original offer.

BDO likewise shortened the offer period for its LTNCD offering to April 26, two days ahead of schedule.

The issue date is slated on May 7, 2018, while the maturity date will be on November 7, 2023.

Deutsche Bank AG and ING Bank N. V. acted as the joint lead arrangers and selling agents for the issue, while BDO and BDO Private Bank were the other selling agents.

LTNCTDs are negotiable certificates of time deposit issued by banks. They usually have higher yields compared to regular time deposits or savings accounts.

Unlike regular time deposits, LTNCTDs cannot be pre-terminated 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.

This instrument is covered by deposit insurance from the Philippine Deposit Insurance Corp. up to P500,000 per depositor.