BDO raises record P11.8 B from oversubscribed LTNCD

MANILA, Philippines - BDO Unibank Inc. raised a record P11.8 billion from the issuance of long-term negotiable certificates of deposit (LTNCDs), more than double the issue size of P5 billion.

“This is the largest single issuance to date of LTNCDs by a local bank,” BDO said in a statement.

The bank owned by retail and banking magnate Henry Sy said strong demand from both retail and institutional investors resulted in an oversubscription of almost two and a half times the issue size.

This prompted the country’s largest lender to cut short the offer period to Aug. 10, a day ahead of schedule.

Proceeds of the fund raising activity would be used to diversify the maturity of its funding sources and support business expansion plans.

This latest tranche of LTNCDs has a term of five and a half years with the interest rate set at 3.625 percent per annum. The issue date is slated on Aug. 18, while the maturity date is on Feb. 18, 2023.

BDO last issued P7.5 billion worth of LTNCDs in April 2015.

The listed bank has tapped Deutsche Bank AG and ING Bank NV as joint lead arrangers and selling agents. Other selling agents include BDO and BDO Private Bank.

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. Interest income is exempt from withholding taxes if the LTNCDs are held for at least five years.

Last January, BDO raised P60 billion through a stock rights offering to support the listed bank’s medium-term growth objectives and provide a comfortable buffer over higher capital requirements with the imposition of the domestic systemically important Bank (DSIB) surcharge by the Bangko Sentral ng Pilipinas (BSP).

BDO earlier reported a slight increase in net income to P13.3 billion in the first half from P13.25 billion in the same period last year.

The Sy-led bank has one of the largest distribution networks, with more than 1,100 operating branches and over 3,700 ATMs nationwide. It also has a full-service branch in Hong Kong as well as 26 overseas remittance and representative offices in Asia, Europe, North America and the Middle East.