China Bank raises P10.25 billion via LTNCD

MANILA, Philippines — China Banking Corp. has raised P10.25 billion after investors swarmed its long-term negotiable certificates of time deposits (LTNCDs) offering.

The fund raising activity was two times oversubscribed, prompting the bank to upsize the fund raising activity from an initial size of P5 billion.

The amount accounted for more than half of the planned P20 billion LTNCD offering. The bank’s debt instrument due 2024 fetched an interest rate of 4.55 percent per annum.

This is the largest LTNCD issuance in the banking industry so far in 2018.  Banks that have issued LTNCDs so far this year include Sy-led BDO Unibank with P8.2 billion, Security Bank with P5.78 billion, Aboitiz-owned Union Bank of the Philippines with P3 billion, and Gotianun-led EastWest Bank with P2.45 billion.

China Bank chief operating officer Romeo Uyan said proceeds of the fund raising activity would support the bank’s strategic initiatives and expansion programs.

“This LTNCD issuance will make long-term funding available for our lending activities and development plans. We thank our depositors and clients for their strong support, which is a clear recognition of China Bank’s bright prospects ahead,” Uyan said after leading the ringing of the bell to herald the listing and start of trading on the Philippine Dealing and Exchange Corp. (PDEx) platform.

This is the third LTNCD listing on PDEx for China Bank following the P6.34 billion LTNCD issuance in 2017 and the P9.59 billion LTNCD offering in 2016.

The country’s 7th largest bank in terms of assets is looking at raising up to P50 billion through a peso funding program covering a combination of LTNCDs, retail bonds, and commercial papers.

China Bank has earmarked P1.8 billion for its capital expenditures this year. About 45 percent of the amount would fund technology projects and initiatives, while 38 percent would go to branch expansion and renovation.

The China Bank Group has a footprint of 596 branches nationwide including 436 China Bank branches, 160 China Bank Savings branches as well as 888 ATMs nationwide.

The continued network expansion could increase ChinaBank‘s manpower to 10,602 this year, 16.2 percent higher than last year’s 9,124.