BDO Unibank, Inc. upsized the offering of its long-term negotiable certificates of deposit (LTNCD) as it saw strong demand from investors.
In a disclosure to the local stock exchange on Friday, the Sy-led bank said it raised the size of its LTNCD offer to P8.2 billion from P5 billion amid robust demand from both retail and and institutional investors.
The offering, which started last week, booked total subscriptions of P12.3 billion, more than twice the offer the bank initially intended.
The latest tranche of long-term notes has a term of five and a half years, carrying an interest rate at 4.375% per annum. The issue date is on May 7, while the maturity date will be on Nov. 7, 2023.
BDO likewise shortened the offer period for its LTNCD to April 26, ending two days ahead of schedule.
LTNCDs, like regular time deposits, offer higher interest rates but unlike time deposits, cannot be pre-terminated. Being “negotiable” means that these can be sold on the secondary market.
Interest will be paid quarterly in arrears, with interest income exempted from withholding tax if the debt is held for at least five years. The LTNCDs are also covered with the Philippine Deposit Insurance Corp. up to a maximum of P500,000 per depositor.
In the previous disclosure, the listed bank said the fresh capital-raising exercise will help the bank “lengthen the maturity of its funding sources and support business expansion plans.”
BDO last tapped long-term notes in August 2017, when it was able to raise P11.8 billion — double the original P5-billion plan. These notes carry a 3.625% interest rate and will mature on Feb. 18, 2023.
Deutsche Bank AG’s, Manila Branch and ING Bank N. V.’s Manila Branch acted as the joint lead arrangers and selling agents for the issuance, while BDO and BDO Private Bank served as selling agents.
BDO saw its net profit little changed in the first quarter at P5.9 billion, slightly higher than the P5.8 billion it booked the same period last year, and was behind the pace on its full-year profit guidance of P31 billion.
BDO shares closed at P130, up by a peso or 0.78% from P129 on Thursday. — Karl Angelo N. Vidal