BDO Unibank Inc., one of the banking arms of conglomerate SM Investments Corp., has shortened the offer period for its P5-billion long-term negotiable certificates of deposit (LTNCD) due to strong demand.
In a disclosure to the Philippine Stock Exchange, BDO said it closed the book-building process for its issue of P5-billion worth of LTNCD as of Wednesday.
“The issue was well received by both retail and institutional investors, resulting in early over-subscription.
To best accommodate investor demand, BDO announced the end of the offer period ahead of the original schedule,” the listed bank said.
The latest tranche of LTNCDs has a term of five and a half years with a final interest rate of 3.125 percent per annum. The issue date is set for December 11, 2013, while the maturity date is on June 11, 2019.
According to BDO, the LTNCD issuance is intended to lengthen the maturity profile of its funding sources, as well as support its medium-term growth objectives.
Some of the features of an LTNCD structure include: tax exemption on interest income for individual investors if held for at least five years; quarterly interest payments; deposit insurance coverage with the Philippine Depository Insurance Corp. of up to P500,000 each depositor; and negotiability subject to market conditions.
The Hongkong and Shanghai Banking Corp. and Deutsche Bank are the joint lead arrangers and selling agents for the issue, while BDO, BDO Private Bank and Multinational Investment Bancorporation are the other selling agents.
The bank announced the LTNCD issue almost two weeks ago through a previous disclosure to the exchange.