BDO UNIBANK, Inc. has raised P6.5 billion in fresh funds via an offer of long-term negotiable certificates of deposit (LTNCD), higher than its initial P5-billion program.

The bank said in a disclosure to the stock exchange on Monday that it closed the offer period for the LTNCDs, which began last Sept. 10, on Sept. 20, as planned.

The LTNCDs have a term of five-and-a-half years while the final interest rate was quoted at 4% per annum, slightly higher than the 3.75% indicative rate the bank set before the offering.

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

BDO said the issue was upsized from the original P5-billion program “following solid demand from mostly retail investors.”

“The LTNCD issuance is part of the bank’s efforts to diversify the maturity of its funding sources and support business expansion plans,” BDO said.

The transaction’s sole arranger was ING Bank N.V.’s Manila branch, which also acted 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 size from the original P5 billion.

In the same month last year, the bank likewise 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 closed at P141.50 apiece on Monday, gaining P1.10 or 0.78% from Friday’s finish. — LWTN