China Bank plans P20-B debt issue


CHINA Banking Corp., a banking affiliate of the SM Group, is planning to issue up to P20 billion worth of long-term negotiable certificates of time deposits (LTNCD) for its initiatives and business expansion moving forward.

In a disclosure to the Philippine Stock Exchange, the bank said it will apply for the Securities and Exchange Commission’s (SEC) shelf registration program.

Under shelf registration, a company may seek approval for a major fundraising initiative which it can issue in tranches over three years.

China Bank said the tranches will likely be in the size of P5 billion to P10 billion each, with tenors ranging from five to seven years. The planned P20-billion LTNCD offering is still subject to regulatory approvals.

“China Bank expects to tap their existing clients and depositors for distribution of the LTNCD,” the bank said.
“This issuance is expected to expand the bank’s long-term deposit base and boost its long-term asset growth,” it added.

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 the maximum coverage, which is currently at P500,000 per depositor.

China Bank last issued LTNCDs in 2008 and the P5-billion issue was oversubscribed only two days into its offering period.

Established in 1920, China Bank mainly caters to the small and medium enterprises (SME) market while also offering banking services to the corporate, commercial and retail segments through its network of over 500 branches nationwide, which includes its thrift bank arm China Bank Savings.


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