EastWest Bank raises P2.45B via LTNCDs

EAST WEST Banking Corp. (EastWest Bank) has raised P2.45 billion from the first tranche of its long-term negotiable certificates of deposit (LTNCD) program, which will support its funding needs.
At the ceremonial listing of the investment instruments at the Philippine Dealing Exchange Corp. on Thursday, the Gotianun-led EastWest Bank said it raised P2.45 billion in fresh funds from the first tranche of its P15-billion LTNCD program.
The notes will mature in 5.5 years and carry an interest rate of 4.625% to be paid quarterly until Dec. 7, 2023.
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 a phone interview, EastWest Bank Senior Executive Vice-President Rafael S. Algarra, Jr. said the listing of the long-term notes was just a “rollover.”
“The LTNCD is a replacement of the maturity we had last May 23. In effect, we just actually rolled over our LTNCD that we already issued five years ago,” Mr. Algarra told BusinessWorld on Thursday.
EastWest Bank said in a disclosure that the LTNCDs will be used “to expand EastWest’s long-term deposit base, as well as support major funding needs of the bank.”
“What we try to do when we issue LTNCD is to make sure that there’s prudent balance sheet management practice. We’re trying to match our long-term assets with our long-term liabilities in order that the balance sheet is properly structured,” Mr. Algarra added.
He also noted the number and the date of the next tranches are dependent on the situation of the market, as well as the bank.
“The timing will be dependent on how our business continues to evolve and how the current market situation evolves,” Mr. Algarra said. “If ever we see our balance sheet requires additional LTNCD, then we have to check what proper timing on when there is a demand in the market for these kinds of instruments.”
Unicapital, Inc. served as the sole issue manager, while EastWest Bank acted as the selling agent for the long-term notes.
EastWest Bank’s LTNCDs bring the total volume of outstanding listings at the PDEx to P875.33 billion.
Meanwhile, the Filinvest group’s cumulative listed outstanding securities stand at P56.25 billion or 6.4% of the total volume of listed issues.
The Bangko Sentral ng Pilipinas approved EastWest Bank’s P15-billion LTNCD program on May 16.
Apart from EastWest Bank, UnionBank of the Philippines, Inc., BDO Unibank, Inc. and Security Bank Corp. have also rolled out LTNCD offerings this year, raising P3 billion, P8.2 billion and P5.78 billion, respectively.
EastWest Bank, the twelfth-biggest commercial bank in the country in asset terms as of end-2017, saw its net income drop in the first quarter by 22% year-on-year to P945.4 million.
EastWest Bank shares went down 0.54% or eight centavos to P14.80 apiece on Thursday. — Karl Angelo N. Vidal