Landbank raises P6B from LTNCDs

MANILA, Philippines - State-run Land Bank of the Philippines raised P6 billion from the issuance of long term negotiable certificate of deposits (LTNCD) to beef up the funding base of the government financial institution.

Landbank president and chief executive officer Gilda Pico said in a statement the additional funds raised by the government-owned bank would boost its ability to fund priority sectors.

“We thank the investor community for partnering with us in nation-building. The proceeds of the issuance will make long-term funding available for the bank’s development programs and lending activities for our mandated and priority sectors,” Pico said.

The fresh fund raising activity was the second tranche of the P15-billion program earlier approved by the Bangko Sentral ng Pilipinas (BSP).

Landbank’s LTNCD issuance was over subscribed as orders reached P7 billion.

The government financial institution decided to only award P6 billion or twice the P3 billion offer size at the start of the offer period to match its expansion plans and lending activities to mandated priority sectors.

The strong demand helped the state-run bank to price at the lowest end of its pricing guidance, or at 3.75 percent per annum for the instrument, which has a maturity of five and a half years.

HSBC acted as the sole lead manager and bookrunner for the transaction, and acted as selling agent together with Landbank and Multinational Investment Bancorporation.

Loans extended to priority sectors by Landbank surged 27.5 percent to P342.86 billion in the first half from P268.9 billion in the same period last year amid sustained growth in financing extended to small farmers and fishers, microenterprises, small and medium enterprises (MSMEs), utilities as well as housing.
Landbank’s priority sectors include small farmers/agrarian reform beneficiaries and fishers (SFFs) and their associations, microenterprises and SMEs, agri- and aqua-businesses, agri-aqua related projects of local government units as well as government-owned and controlled corporations, communications, transportation, housing, education, health care, environment-related projects, tourism, and utilities.

During the period, Landbank’s total loan portfolio went up 25.8 percent to P413.98 billion from P328.9 billion.

Earnings of Landbank went up 19 percent to P7.2 billion in the first half from P6.04 billion recorded in the same period last year. — Lawrence Agcaoili