BDO Unibank Inc. will again tap the fixed-income market with the issuance of another P5-billion long-term negotiable certificates of deposit (LTNCDs) or high-yielding deposit instruments.
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. Deposit insurance coverage with the Philippine Depository Insurance Corp. for this kind of issuance is up to a maximum of P500,000 each depositor.
“The LTNCD issuance is intended to lengthen the maturity profile of the bank’s funding sources, as well as support its medium-term growth objectives,” BDO said in a disclosure to the Philippine Stock Exchange on Monday.
The new tranche of BDO’s LTNCDs will have a term of five and a half years, with interest to be paid on a quarterly basis.
Indicative yield for the issuance ranges from 3 percent to 3.25 percent per annum, while the final coupon rate will be set and announced at the end of the offer period. The minimum investment is P100,000 with increments of P50,000.
The offer period started Monday and will last until November 29, 2013, while the issue date is set for December 11, 2013. BDO, however, reserves the right to adjust the timing of the offer as needed.
The Hongkong and Shanghai Banking Corp. and Deutsche Bank are the joint lead arrangers and selling agents for the LTNCD, while BDO, BDO Private Bank and Multinational Investment Bancorporation are the other selling agents.
BDO last issued P5-billion worth of LTNCDs in September 2013. After having been oversubscribed by investors, the offer was already completed just more than a week after it was launched.