BDO to issue P5B of LTNCDs at an indicative rate of 3.75%

BDO Unibank Inc. on Tuesday announced the issuance of P5 billion worth of long-term negotiable certificates of deposit (LTNCD) to finance its business and expansion plans.

In a regulatory filing submitted by BDO corporate information officer Elmer Serrano, the Sy-led lender said the LTNCD issuance is part of the “bank’s efforts to diversify the maturity profile of its funding sources and support business expansion plans.”

The offer period is from September 10 to September 20, with the issue date set on September 27, 2019.

“The bank, however, reserves the right to shorten the offer period, and has the option to increase the issue size, depending on market demand,” BDO said.

Its latest tranche of LTNCDs will have a term of five and a half years with an indicative rate in the area of 3.75%.

The final coupon rate will be set at the end of the offer period.

Interest will be paid quarterly, calculated on 30/360-day-count basis.

The minimum investment is P100,000 with increments of P50,000.

“LTNCDs are negotiable certificates of deposit with a designated maturity, and represent a bank’s obligation to pay the face value upon maturity, with periodic coupon or interest payments during the life of the deposit,” BDO said.

“LTNCDs are an attractive investment especially for individuals, as interest income is exempt from withholding taxes if the LTNCDs are held for at least five years, based on current regulations,” it added.

LTNCDs are covered by deposit insurance with the Philippine Deposit Insurance Corp. (PDIC), subject to PDIC’s applicable rules and regulations, including maximum insurance coverage per depositor up to P500,000.

ING Bank N.V., Manila Branch has been tapped as the sole arranger and selling agent for the issue, while BDO and BDO Private Bank are the other selling agents. —Ted Cordero/VDS, GMA News