SECURITY BANK Corp. is looking to raise P5 billion through the issuance of long-term negotiable certificates of deposit (LTNCD) to manage its liabilities and expand its funding base.
In a disclosure to the local bourse on Tuesday, the bank said the LTNCDs will have a term of five-and-a-half years with indicative pricing of 3.75%-4%.
The offer period started yesterday and will run until Sept. 4, although the lender can adjust this timeline as needed.
The LTNCDs’ coupon will be set before or at the end of the offer period. The interest will be paid quarterly in arrears.
Security Bank said the papers will be available for a minimum investment of P50,000 with increments of P10,000 thereafter.
The debt papers will be issued on Sept. 16.
Deutsche Bank AG-Manila Branch is the sole lead arranger for the issue, and will also act as a selling agent alongside Security 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.”
This issue marks the first tranche of Security Bank’s P20-billion LTNCD program announced in June.
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.
Deutsche Bank served as the sole arranger and bookrunner of the transaction in cooperation with Security Bank.
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, it reported last week.
Security Bank shares closed at P195 apiece on Tuesday, up P1.50 or 0.78% from the previous finish. — B.M. Laforga