BDO Unibank Inc., the largest lender controlled by the Sy family, started Wednesday the offering period for P5 billion worth of long-term negotiable certificates of deposit to lengthen the maturity of its funding sources and support business expansion plans.
BDO said in a press statement Wednesday the latest tranche of LTNCDs would have a term of five and a half years with indicative pricing of 5.125 percent to 5.50 percent.
“The final coupon rate will be set prior to or at the end of the offer period. Interest will be paid quarterly in arrears,” the bank said.
BDO has the option to increase the issue size, depending on market demand. BDO last issued P8.2 billion worth of LTNCDs in May last year.
The minimum investment is P100,000 with increments of P50,000. The offer period is set from March 27 up to April 5, with the issue date on April 12, 2019. The bank, however, reserves the right to adjust the timing of the offer as needed.
Deutsche Bank AG, Manila branch is the sole lead arranger and selling agent for the issue, while BDO and BDO Private Bank are the other selling agents. BDO Capital and Investment Corp. serves as BDO’s financial advisor.
LTNCDs are negotiable certificates of deposit with a designated maturity, and 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 are an attractive investment especially for individuals, as interest income is exempt from withholding taxes if the LTNCDs are held for at least five years.
LTNCDs are covered by deposit insurance with Philippine Deposit Insurance Corp., subject to PDIC’s applicable rules and regulations, including maximum insurance coverage per depositor.
BDO is a full-service universal bank which provides a wide range of corporate and retail banking services. The services include traditional loan and deposit products, as well as treasury, trust and investments, investment banking, private banking, rural banking, cash management, leasing and finance, remittance, insurance, retail cash cards and credit card services.
