BANK OF THE Philippine Islands (BPI) launched a P3-billion offering of long-term negotiable certificates of time deposit (LTNCTD) on Monday to diversify its funding sources and support its expansion plans.

The P3 billion worth of LTNCTDs have a tenor of five-and-a-half years, the Ayala-led bank said in a disclosure to the local bourse yesterday, with the lender having the option to upsize its offer volume.

The offer period for the debt instruments will run until Oct. 16, with the issue and listing dates set for Oct. 25. However, the bank can adjust the timing of the offer if needed, it said.

The LTNCDs carry an interest rate of four percent per annum which will be paid quarterly. The papers can be bought for a minimum investment of P1 million and in increments of P100,000 thereafter.

Hongkong and Shanghai Banking Corp. Ltd. is the sole arranger and participating selling agent of this deal, while BPI Capital Corp. is the sole selling agent for the LTNCDs.

BPI, in a filing on Monday, said the central bank has approved its plan to offer up to P50 billion in LTNCDs.

The LTNCDs will be offered in one or more tranches.

The P3-billion offering it started on Monday constitutes the first tranche of the program.

“The issuance will support BPI’s expansion plans and diversify the bank’s funding sources,” the Ayala-led lender said in the disclosure.

LTNCTDs are like regular time deposits that offer higher interest rates but cannot be pre-terminated by holders.

However, the notes can be traded on the secondary market prior to maturity, making them “negotiable.”

In 2017, the bank launched a P30-billion LTNCD program in a bid to expand its funding sources.

BPI last month issued $300 million in ASEAN green bonds and two-year 100-million Swiss franc-denominated negative-yielding green bonds as part of its $2-billion medium-term note (MTN) program established in June last year.

In its maiden drawdown from the MTN, BPI raised $600 million in August last year via five-year senior unsecured fixed-rate bonds quoted at 4.25%.

The Ayala-led lender posted a net income of P7.01 billion in the second quarter, up 46.8% from a year ago, amid strong interest and non-interest income growth.

This brought BPI’s bottom line for the first semester to P13.74 billion, up 24.6% from the P11.03 billion booked in the same period last year.

The bank’s total revenues for the first half climbed 23.3% to P45.9 billion, brought by the 24.1% year-on-year growth in net interest income, which reached P32.36 billion.

BPI shares closed at P92.20 apiece on Tuesday, dropping 80 centavos or 0.86%. — BML

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