SECURITY BANK Corp. has raised P6.06 billion via long-term negotiable certificates of deposit (LTNCD), with the proceeds meant to diversify its funding sources and support expansion plans.
In a disclosure to the local bourse on Monday, Security Bank said it successfully raised P6.06 billion via its LTNCD offering, which was upsized from the initial plan of P5 billion amid “solid demand from both retail and institutional investors…despite rising interest rates and broader market volatility.”
The LTNCDs, which have a tenor of five-and-a-half years, were priced at 4%, at the higher end of its initial indicative pricing of 3.75%-4%.
The debt papers were issued yesterday.
“This issuance has firmly placed our credit amongst retail investors — the LTNCD gives the investing public the chance to further express their confidence in Security Bank’s stability and ability to grow,” Security Bank Executive Vice President and Treasurer Raul Martin A. Pedro was quoted as saying in the statement.
The P6.06-billion issuance marks Security Bank’s first drawdown from its P20-billion LTNCD program announced in June.
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.”
Deutsche Bank AG’s Manila Branch served as the issue’s sole arranger and also acted as a selling agent in cooperation with Security Bank.
The LTNCD issue marks the second time the bank has tapped debt capital markets this year.
Security Bank in June raised P18 billion via the issuance of two-year bonds, well beyond the initial program of P5 billion as the offer was oversubscribed.
The fixed-rate two-year peso bonds were priced at the lower end of the range at 5.875% per annum.
Security Bank posted a higher net income in the second quarter following the expansion of its core businesses.
The bank booked a P2.57-billion net profit last quarter, up 31.79% from the P1.95 billion posted in the same period last year.
This brought its first-half net earnings to P4.95 billion, up 15.38% from last year’s P4.29 billion.
Overall, Security Bank’s total assets increased 8% to P776.78 billion at end-June from P766.86 billion as of December 2018.
Security Bank shares lost P1.50 or 0.75% to close at P197.50 on Monday. — Beatrice M. Laforga