BDO raises P7.3 billion from LTNCDs

BDO UNIBANK, Inc. raised P7.3 billion from its latest issuance of long-term debt papers, with the fresh funding meant to support the lender’s expansion plans and rebalance its borrowing profile.

In a regulatory filing on Friday, the Sy-led lender said their latest offering of long-term negotiable certificates of deposit (LTNCDs) shored up strong demand from investors, which allowed them to bump up the amount from the original P5-billion offer.

The bank also decided to cut the offer period one day early on April 4.

BDO placed 5.5-year notes on the auction block, which came with an interest rate of 5.375% per annum to be paid quarterly. The bonds will be issued by April 12 and will mature by Oct. 12, 2024.

Investors can invest for a minimum of P100,000 with increments of P50,000.

“The LTNCD issuance is part of the bank’s efforts to lengthen the maturity of its funding sources and support business expansion plans,” BDO said in the statement.

LTNCDs offer higher interest rates like time deposits floated by banks. However, they cannot be pre-terminated but may be sold or traded in the secondary market.

These instruments are also exempted from interest income if kept intact for at least five years, and are covered by deposit insurance worth a maximum of P5,000 per depositor.

BDO, the biggest bank in asset terms in the Philippines, booked an all-time high net income of P32.7 billion in 2018.

Prior to this offering, the bank raised P8.2 billion also via LTNCDs in April last year, which came with a 4.375% annual yield.

In a related development, BDO also announced a scheduled downtime during the Holy Week for system upgrades. The bank said its automated teller machines, mobile and online banking services, plus debit and cash card transactions, will be unavailable from 8 p.m. of April 19, Good Friday to 12 noon of Black Saturday.

BDO shares closed at P131.30 each on Friday, up 80 centavos or 0.61%. — Melissa Luz T. Lopez