BDO to offer P5.0 Bn LTNCDs

BDO Unibank, Inc. (BDO) is set to offer P5.0 billion in Long-Term Negotiable Certificates of Deposit (LTNCD) as part of the Bank’s efforts to diversify the maturity profile of its funding sources and support business expansion plans. BDO earlier issued P7.32 billion worth of LTNCDs in April this year.

This latest tranche of LTNCDs will have a term of five and a half (5 ½) years with an indicative rate in the area of 3.75%.  The final coupon rate will be set at the end of the offer period. Interest will be paid quarterly, calculated on a 30/360 day count basis. The minimum investment is P100,000 with increments of P50,000.

The offer period will be from September 10 to September 20, with the issue date set for September 27, 2019. The Bank however, reserves the right to shorten the offer period, and has the option to increase the issue size, depending on market demand.

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 (5) years, based on current regulations. LTNCDs are covered by deposit insurance with the PDIC, subject to PDIC’s applicable rules and regulations, including maximum insurance coverage per depositor up to P500,000.

ING Bank N.V., Manila Branch (ING) is the Sole Arranger and Selling Agent for the issue, while BDO and BDO Private Bank are the other selling agents.