Banco de Oro launches P5-B LTNCDs

The Banco de Oro Universal Bank (BdO) is set to offer a new tranche of long term negotiable certificates of time deposit (LTNCDs) next month. The Bangko Sentral ng Pilipinas (BSP) already approved the issue in an aggregate amount of up to P5 billion over the course of one year.

The LTNCD will have a maximum maturity of five years and one month.

The so-called Series 3 LTNCD will have a fixed interest rate based on the five-year MART1 benchmark rate on the interest setting date, plus a premium or discount to be determined, computed on Actual/360 basis.

Interest setting date is the date prior to the offer period, to be mutually agreed upon by the issuer and arranger. Standard Chartered Bank has been tapped as arranger for the issue.

The LTNCD will be offered through the selling agents including BDO Capital and Investment Corp., BDO Private Bank Inc., BDO Securities Corp., Citicorp Financial Services and Insurance Brokerage Phils. Inc., and Standard Chartered Bank.

The issuance of the LTNCDs are intended to diversify the maturity profile of the its sources of funding and to fund the growth in its business operations, including loans and investing in debt securities.

BdO issued its first P5-billion LTNCD program in two tranches in 2005: LTNCD Series 1 amounted to P2.1 billion issued June 1, 2005, to mature on June 2, 2010 (five years and one day); and Series 2 amounted to P2.9 billion, issued Nov. 23, 2005, to mature on Nov. 24, 2010 (five years and one day).

The new offering will be called Series 3.

An LTNCD is a certificate of deposit issued by banks with a maturity of at least five years. Unlike regular time deposits, an LTNCD may be negotiated over its life. Banks issue LTNCDs in order to lengthen the maturity profile of their deposits and match their long-term loans.

BdO is the first and only domestic bank to issue LTNCD. Among the foreign banks, Citibank has also issued about P1.5- billion LTNCD last year.

Banco de Oro ranked among the top eight banks in the Philippines in terms of total deposits, net loans, and capital assets end June.

Consolidated total assets was placed at P233.8 billion and P284.1 billion as of Dec. 31, 2005 and June 30, 2006, respectively.

Total capital funds were P20.2 billion and P21.4 billion as of Dec. 31, 2005 and June 30, 2006, respectively. – Ted Torres