China Bank offers P5-B notes at 3.25%

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P20-B LTNCD program approved by BSP

CHINA Banking Corp., a banking affiliate of the SM Group, is issuing an initial P5 billion in long-term negotiable certificates of time deposits (LTNCDs) out of its P20-billion LTNCD program to fund its strategic initiatives and business growth in the next few years.

In a disclosure to the Philippine Stock Exchange on Monday, China Bank said it is issuing the first tranche of P5-billion LTNCDs from November 7 to November 11.

The notes offer a yield of 3.25 percent annually, payable quarterly. The minimum investment size is set at P50,000 with increments of P50,000 thereafter.


China Bank said the Bangko Sentral ng Pilipinas (BSP) has approved its capital raising activity, which will enable it to issue multiple tranches of LTNCDs with tenors ranging between five and 10 years.

Australia and New Zealand Banking Group Ltd (ANZ), The Hongkong and Shanghai Banking Corp. Ltd.
(HSBC) and Standard Chartered Bank (SCB) have been appointed joint lead arrangers, bookrunners and selling agents for the deal.

China Bank, China Bank Capital Corp., and Multinational Investment Bancorporation (MIB) will also serve as selling agents for the offering.

The notes will be listed on the Philippine Dealing and Exchange Corp. (PDEX).

China Bank said the LTNCDs are expected to expand the bank’s long-term deposit base and boost its long-term asset growth.

LTNCDs are time deposits that have longer maturity and are higher yielding than regular deposits. These instruments are negotiable and insured with the Philippine Deposit Insurance Corp. up to a maximum coverage which is currently at P500,000.00 per depositor.

“The transaction marks the return of China Bank to the peso debt market after its successful initial LTNCD transaction in 2008, when it successfully offered its five-year P5 billion LTNCD maiden issue which was oversubscribed only two (2) days into its offering period,” the bank said.

Established in 1920, China Bank is an affiliate bank of tycoon Henry Sy and caters mainly to the small and medium enterprises (SME) market through its network of over 500 branches nationwide, which includes its thrift bank arm China Bank Savings.

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