BDO issues new P5-B LTNCDs

MANILA, Philippines - BDO Unibank Inc., the main banking unit of the SM Group, has issued another tranche of P5 billion worth of long-term negotiable certificates of deposit (LTNCDs) to offer investors a chance to further diversify their investment portfolio.

In a statement, BDO said the new tranche of LTNCDs carries a term of five and a half years with interest to be paid on a quarterly basis. Indicative yield ranges from three to 3.25 percent per annum.

BDO said the offer period started yesterday and would last until Nov. 29, while the issue date is set on Dec. 11.

The final coupon rate will be set and announced at the end of the offer period. The minimum investment is P100,000 with increments of P50,000.

LTNCDs offer attractive features such as: tax exemption on interest income for individual investors if held for at least five years; deposit insurance coverage with the PDIC up to a maximum of P500,000 per depositor; and negotiability, subject to market conditions.

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

The LTNCD issuance is intended to lengthen the maturity profile of the bank’s funding sources as well as support its medium-term growth objectives. BDO last issued P5 billion worth of LTNCDs last September.

HSBC and Deutsche Bank (DB) are the joint lead arrangers and selling agents while BDO, BDO Private Bank and Multinational Investment Bancorporation are the other selling agents.

Interested investors can go to any BDO branch during the offer period to secure their application forms.