Security Bank eyes P50 billion LTNCD issue

MANILA, Philippines — Security Bank Corp. is raising P50 billion via the issuance of long-term negotiable certificates of deposits (LTNCDs) as it returns to the domestic debt market to finance future asset expansion.

In a disclosure to the Philippine Stock Exchange (PSE), Security Bank said its board of directors approved the planned fund raising activity during its meeting Tuesday.

 Raul Pedro, executive vice president and treasurer at Security Bank, told The STAR the planned fund raising activity would still have to be approved by the Bangko Sentral ng Pilipinas (BSP).

“The P50 billion LTNCD is a new approval from the board. (With) the funds, (we) would be able to lengthen our deposit liabilities and fund future growth of assets,” Pedro said in a text message.

Last June, the country’s seventh largest lender in terms of assets as of end September received the green light from the BSP to issue P20 billion worth of LTNCDs.

Security Bank raised P6.06 billion via the issuance of LTNCDs in September last year, followed by another P2.31 billion in December last year and P2.07 billion in February. All the debt papers issued are due in 2025.

“We were not able to finish off the P20 billion for last year, but the approval of the BSP will expire in May,” he said.

The listed bank continues to tap both the onshore and offshore debt markets anew to finance its expansion program and augment its loan portfolio.

The bank also issued P8.6 billion worth of LTNCDs in November 2017 and P5.78 billion worth of LTNCDs in May 2018. The LTNCDs are scheduled to mature in 2023.

Security Bank announced its plan to raise P50 billion by issuing peso-denominated bonds in December 2018 to support growing lending activities and to diversify fund sources.

So far, the bank raised P18 billion via the issuance of fixed rate bonds due 2021 last June.

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