Security Bank raises P8.6B in fresh funds via LTNCDs
SECURITY BANK Corp. has raised P8.6 billion in fresh long-term notes, with the funds seen to support the lender’s expansion plans and manage existing debts.
In a statement, the listed lender said they received strong demand for the first tranche of long-term negotiable certificates of time deposit (LTNCD), allowing them to raise a bigger sum from the P5 billion which they initially offered to investors.
The debt notes carried a coupon rate of 3.875% for a 5.5-year tenor, due May 8, 2023.
The instruments were listed at the Philippine Dealing & Exchange Corp., marking the first debt instrument which Security Bank listed in the platform, the lender said. This allows investors to gain “better access” to the secondary market.
LTNCDs, like the regular time deposits, offer higher interest rates but cannot be pre-terminated. Instead, these can be sold at the secondary market.
In October, Security Bank secured approval from the Bangko Sentral ng Pilipinas (BSP) to float as much as P20 billion in long-term debt papers within a one-year period. The lender said the fresh funds it wants to raise will be used to gain access to “cost-effective” funding, which likewise allows the bank to diversify its funding sources, lengthen the tenor of its liabilities, and support future growth.
The Hongkong and Shanghai Banking Corp. and Standard Chartered Bank were assigned as joint lead arrangers and bookrunners, and will also act as selling agents together with Security Bank and Multinational Investment Bancorporation.
The bank last offered LTNCDs in August 2012, where it raised P5 billion in fresh funding.
Security Bank is the fifth-largest bank in the Philippines based on asset terms, according to central bank data.
The bank reported a P2.14 billion net income in the third quarter, jumping by 21% from the P1.8 billion posted during the same period in 2016 on the back of a 38% increase in loans and a 44% surge in deposits.
This brought Security Bank’s nine-month net profit to P7.4 billion, up by 12% from P6.6 billion during the comparable year-ago period.
Shares in Security Bank ended yesterday’s session at P259.40 each, up P6.40 or 2.53% from Tuesday’s close of P253 apiece. — Melissa Luz T. Lopez
