PNB raises P4.6 billion via LTNCDs

PHILIPPINE National Bank (PNB) has raised P4.6 billion in long-term negotiable certificates of deposit (LTNCD), marking the second tranche of its P20-billion program approved by the central bank.

PNB on Friday listed the debt papers which have a tenor of 5.5 years and an interest rate of 4.375% at the Philippine Dealing & Exchange Corp. (PDEx).

The bank’s offer was more than twice oversubscribed against the announced issue size of P2 billion, PNB Chief Financial Officer Nelson C. Reyes said during the listing ceremony in Makati on Friday.

“This second tranche puts our aggregate LTNCD issuance for the year to P12.82 billion and brings the aggregate total of new PDEx listing from PNB for the year to P26.7 billion,” Mr. Reyes said.

“Aside from business expansion, the LTNCD issuances support the bank’s efforts to diversify its funding sources to meet the financial needs of clients,” the bank said in a statement on Friday.

PNB said last month that it is offering the LTNCDs to extend the maturity profile of its liabilities, support its compliance with regulatory liquidity ratios and raise long-term funds for general corporate purposes.

The central bank approved PNB’s LTNCD program in October 2018.

PNB offered the LTNCDs to investors from Sept. 27 to Oct. 4. The LTNCDs were offered at an indicative rate of 4.25%–4.375%.

The Hongkong and Shanghai Banking Corp. Ltd. was the sole arranger and bookrunner of the transaction. It also acted as a selling agent alongside PNB, First Metro Investment Corp. and Multinational Investment Bancorporation.

In February, PNB issued P8.22 billion worth of 5.5-year LTNCDs, which carry an interest rate of 5.75% to be paid quarterly until 2024. This was the first tranche of its P20-billion LTNCD program.

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.”

PDEx President and Chief Operating Officer Antonino A. Nakpil said in his speech during the listing ceremony that bond listings have reached new highs.

“In terms of primary market activity, we are already at record levels of new bond listings today now at P274.8 billion for 2019, a 91% increase from the same period last year,” Mr. Nakpil said.

PNB’s net earnings fell to P3.9 billion in the six months ended June from P5.4 billion a year earlier, which included a one-time gain from the sale of foreclosed assets.

Assets of PNB and its units grew 24% to P1.09 trillion. The bank’s net interest income rose 13% to P14.7 billion, while loans and receivables increased by the same rate to P594.1 billion.

Shares in PNB went down 65 centavos or 1.49% to close at P42.85 apiece on Friday. — with a report from LWTN