AIG Savings Bank launches LTNCD

The AIG PhilAm Savings Bank has launched its maiden issue of long-term negotiable certificates of deposit (LTNCD).

The LTNCD, which commenced its offer period early July, will be the first LTNCD issue in the domestic capital market for a thrift bank.

AIG Philam Savings will offer a minimum of P1 billion worth of LTNCDs for the first series.  The long-term plan is to offer up to P3 billion of LTNCDs over a 12-month period.

The funds generated will be used for its long-term assets expansion.

“Our stable operational profitability and affiliation with American International Group (AIG), recently ranked by Forbes Magazine as the sixth largest public company in the world based on revenues, profits, assets and market value, and with Philamlife, the largest and most diversified insurance company in the Philippines, will be the key success factors for the LTNCD issue offer,” AIG PhilAm Savings president and chief executive officer Joven Reyes said.

“Our LTNCD will pay interest on a monthly basis, unlike other LTNCDs of recent offering.  Furthermore, it is tax-free if held till maturity while providing liquidity to the investor due to its negotiability in the secondary market,“ he added.

The LTNCD will carry a maturity of five years and one month, and will bear a fixed interest rate of 7.25 percent per annum.

Commonly referred to as a bond-deposit hybrid product, the LTNCD together with other AIG PhilAm Bank deposits, is covered by the Philippine Deposit Insurance Corp. (PDIC) up to P250,000 per depositor.

Like a bond, the LTNCD is a long-term investment that may be negotiated before maturity.

Standard Chartered Bank (SCB) was appointed as arranger, registrar, paying agent and market maker.

AIG PhilAm Savings Bank, along with SCB and Citicorp Financial Services & Insurance Brokerage Phils. Inc., are the designated selling agents.

AIG PhilAm Savings Bank, Inc. is a subsidiary of American International Group, Inc. (AIG), a leading international insurance and financial organization with operations in more than 130 countries and jurisdictions.        — Ted Torres