PNB to redeem P3.5 B debt

MANILA, Philippines - Philippine National Bank (PNB) is set to redeem P3.5 billion worth of unsecured debt after successfully raising fresh funds from the issuance of long term negotiable certificates of time deposits (LTNCD) last December.

PNB informed the Philippine Stock Exchange (PSE) it received the green light from the Bangko Sentral ng Pilipinas (BSP) to exercise its call option on the P3.5 billion lower Tier 2 unsecured subordinated debt issued in May 2012.

The BSP’s Monetary Board approved last Jan. 26 the request of PNB subject to compliance with the Manual of Regulations for Banks.

In accordance with the terms and conditions of the notes, PNB said the notes would be redeemed on May 10 at an amount equal to the aggregate issue price of the notes plus accrued and unpaid interest thereon up to but excluding the call option date.

The call option amount would be paid to all holders on record as of April 25.

The LTNCDs offer higher interest rates but may not be pre-terminated like regular time deposits. They fetched a coupon rate of 3.25 percent annually.

The BSP gave PNB the authority to issue up to P20 billion in LTNCDs last Nov. 28.

Proceeds for the fund raising activity would be used to extend the maturity profile of the bank’s liabilities as part of overall liability management and to raise long-term funds for general corporate purposes.

Earnings of PNB rose 21 percent to P5.7 billion in the first nine months of last year amid the strong performance of its core businesses. Core revenues continued to grow as net interest income increased 13 percent to P14.5 billion, contributing to two-thirds of total operating income.

PNB’s total consolidated resources rose 10 percent to P718.4 billion making it the country’s sixth largest bank in terms of assets as of the end of September.

PNB has 670 branches and 956 ATMs strategically located nationwide. It also has the most extensive international footprint across Asia, Europe, Middle East and North America among Philippines banks with 74 overseas branches and offices.