BPI to raise P3B from LTNCDs
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Tue, 08 Oct 2019 16:27:48 +0000
AYALA-led Bank of the Philippine Islands (BPI) is looking to generate P3 billion in fresh funds from its offer of long-term negotiable certificates of deposit (LTNCDs), with an option to upsize.
In a disclosure on Tuesday, the lender said the LTNCDs would have a term of five-and-a-half years with an interest rate of 4 percent per annum paid quarterly.
The offer period will be from October 7 to 18, with the issue and listing date set on October 25, . The bank, however, said it reserved the right to adjust the timing of the offer as needed.
Hong Kong and Shanghai Banking Corp. Ltd. (HSBC) is the sole arranger and participating selling agent of the deal, while BPI Capital Corp. is the sole selling agent.
The LTNCD issuance is meant to “support the bank’s expansion plans, diversify funding sources and offer investors an attractive investment instrument,” BPI said.
Banks sell instruments like LTNCDs to raise capital without having to sell shares. The bank is obliged to redeem the face value of the certificate upon maturity and pay out periodic coupons or interest payments during the life of the deposit.
The notes are similar to time deposits, but have longer maturities and higher yields. They are negotiable and are insured with the Philippine Deposit Insurance Corp. up to P500,000 for every depositor.