BDO UNIBANK, Inc. is set to issue P5 billion worth of long-term negotiable certificates of deposit (LTNCD) to diversify its funding sources and fund its expansion plans.

In a statement released on Tuesday, the Sy-led bank said the notes have a term of five-and-a-half years and will be sold for a minimum investment of P100,000 with increments of P50,000 thereafter.

The LTNCDs have an indicative rate of 3.75%. The lender said it will set the final coupon rate at the end of the offer period which runs from Sept. 10 to Sept. 20. The interest will be paid quarterly.

The debt papers are set to be issued on Sept. 27.

The bank said it can change the offer period or increase the issue size based on market demand.

BDO’s latest offer of LTNCDs is “part of the bank’s efforts to diversify the maturity profile of its funding sources and support business expansion plans,” the lender said in the statement.

The transaction’s sole arranger will be ING Bank N.V.’s Manila branch, which will also act as a selling agent along with BDO and BDO Private Bank.

Like regular time deposits offered by banks, LTNCDs offer higher interest rates. However, LTNCDs cannot be pre-terminated but can be sold on the secondary market, making them “negotiable.”

In April, the Sy-led lender also issued 5.5-year LTNCDs worth P7.32 billion with an interest rate of 5.375%. Strong demand from investors allowed the bank to expand the issue volume from the original P5 billion.

In the same month last year, the bank also raised P8.2 billion via 5.5-year LTNCDs with a rate of 4.375% per annum.

BDO’s net income in second quarter jumped by 43.4% P10.393 billion, bringing its first semester bottom line to P20.140 billion, an 53.6% increase year on year.

It was the largest bank in the country in terms of total assets, deposits and trust funds as of June 30.

Shares in BDO went up 50 centavos or 0.35% to close at P143 apiece on Tuesday. — B.M. Laforga

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