BDO UNIBANK, Inc. is set to redeem the unsecured subordinated Tier 2 notes it issued in 2014 on March 10, ahead of their scheduled maturity in 2025.

In a disclosure to the local bourse Tuesday, the Sy-led bank said it will exercise its right to redeem Series 2014-1 unsecured subordinated notes, eligible as Tier 2 capital, which were initially due on 2025.

“Please be informed that BDO Unibank, Inc. shall be notifying the holders of the series 2014-1 unsecured subordinated notes eligible as Tier 2 capital due 2025…issued last 10 December 2014 of the exercise of its right to redeem on 10 March 2020 (the optional redemption date). The redemption of all the Tier 2 notes is pursuant to the terms and conditions of said notes,” BDO said in its statement on Tuesday.

The lender said all of the Tier 2 notes will be redeemed “for cash at a redemption price equal to the face value of the Tier 2 notes, plus accrued interest covering the accrued and unpaid interest as of but excluding 10 March 2020.”

The bank in 2014 offered up to P10 billion worth of unsecured subordinated notes, qualified as the Tier 2 capital.

The notes carry an annual interest rate of 5.1875% and has an initial maturity date of March 1, 2025.

In September last year, the bank raised P6.5 billion via its offer of five-and-a-half year long-term negotiable certificates of deposit (LTNCD), upsized from its initial target of P5 billion. The LTNCDs carry an interest rate of four percent per annum.

BDO saw its net income surge 43.35% to P11.967 billion in the third quarter last year on the back of higher recurring core revenues.

The bank’s shares remained unchanged at P155 apiece on Tuesday. — B.M. Laforga