PNB, UBP raise billions each from notes

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Two listed banks separately raised more than P3 billion through a successful offer of long-term negotiable certificates of time deposits (LTNCD).

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The Philippine National Bank (PNB) said in its disclosure to the Philippine Stock Exchange on Friday that it concluded its second LTNCD offering in 2013, raising a total of P4 billion.

The LTNCDs that PNB issued carry a maturity of five-and-a-half years, and have a coupon of 3.25 percent per annum. The public offer period ran from October 9 to 16. The issue date will be on October 21.

“This was done to address  the unmet demand from its customers after PNB’s first issuance in July was over-subscribed just a few hours into the offer. The proceeds of the second offering will be used for general corporate purposes and to further strengthen banking operations,” PNB said.

Meanwhile, another listed firm, Union Bank of the Philippines (UBP), also issued its LTNCDs in local currency.

The bank raised a total P3 billion in fixed rate LTNCDs, carrying a coupon of 3.50 percent per annum, which is payable quarterly. The maturity date of the LTNCD is on April 17, 2019.

The net proceeds of the issuance, according to UBP, will be utilized to improve its deposit maturity profile and support business expansion plans.

LTNCDs are negotiable certificates of time deposit with a designated maturity or tenor representing a bank’s obligation to pay the face value upon maturity, as well as make periodic coupon or interest payments during the life of       the deposit.

Also, LTNCDs are insured by the Philippine Deposit and Insurance Corp. for up to P500,000 and are tax exempt for qualified individuals if held for at least five years.

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