BDO to issue additional LTNCDs

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BDO Unibank Inc. (BDO) will issue another tranche of up to P5-billion worth of Long-Term Negotiable Certificates of Deposit (LTNCDs) as part of the Henry Sy-led bank’s effort to expand the maturity profile of its funding sources, among others.

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LTNCDs are negotiable certificates of deposit with a designated maturity, and represents a bank’s obligation to pay the face value upon maturity, with periodic coupon or interest payments during the life of the deposit.

According to BDO, this tranche of LTNCDs that it is going to offer will carry a maturity of seven years. The indicative pricing for the issuance will be in the range of 3 percent to 3.25 percent per annum and will be finalized at the end of the offer period.

With minimum investment of P100,000, interest will be paid quarterly and will be tax exempt for individual investors if held for at least five years. Because of the suspension of work in Metro Manila early this week because of the monsoon rains, the close of the offer period has been extended from August 27 to August 30, with the issue date now set for September 12, 2013. BDO also reserved the right to adjust the timing of the offer as needed.

“LTNCDs are an attractive investment specially 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 the PDIC up to a maximum amount of P500,000 per depositor,” BDO said in a statement.

Standard Chartered Bank and ING Bank N.V. Manila Branch are the joint lead arrangers, selling agents and market makers for the LTNCD, while BDO and BDO Private Bank are the other selling agents.

The last time BDO issued P5-billion worth of LTNCDs was still in March 2013.

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