RCBC extends P5-B LTNCD offer period

MANILA, Philippines - Rizal Commercial Banking Corp. (RCBC), the banking arm of the Yuchengco Group, has extended the offer period and the issue date for its P5-billion long-term negotiable certificates of time deposit (LTNCD).

RCBC informed the Philippine Stock Exchange (PSE) that it would close the offer period on Nov. 8 instead of Oct. 31.

The bank also moved the issue date of the five-year LTNCDs to Nov. 14 from Nov. 8.

RCBC said the extension was due to the shortened work week caused by the public holidays.

The LTNCD issuance is composed of two series: Series A which will bear an interest rate of 3.25 percent, and Series B at 3.5 percent.

The minimum denomination for the offer  is P50,000 and in increments of P10,000.

RCBC has designated HSBC as the sole issue manager while RCBC, RCBC Capital Corp. and RCBC Savings Bank will be selling agents.

In June this year, the bank’s board had approved the issuance of the peso-denominated LTNCD. Last September, it secured the go-signal from Bangko Sentral ng Pilipinas (BSP).

Instead of issuing more shares or launching a new debt instrument,  banks are increasingly resorting to LTNCDs which consumers find more attractive because they are relatively safe yet high-yielding compared to traditional deposits.

LTNCDs are negotiable certificates of deposit indicating an amount of indebtedness of a bank with a designated maturity.

These certificates form part of a bank’s deposits and rank senior to all unsecured and subordinated debts, and all classes of equity securities.

They are similar in a way but differ primarily in the negotiability of the instrument. A long-term time deposit cannot be transferred during its life, while there is a market for LTNCDs should the holder wish to sell it prior to maturity date.

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