Pasay–(PHStocks)–Philippine National Bank (PSE: PNB) has successfully concluded its second Long Term Negotiable Certificates of Time Deposits (LTNCD) offering in 2013. This was done to address the unmet demand from its customers after PNB’s first issuance in uly was oversubscribed just a few hours into the offer. The proceeds of the second offering will be used for general corporate purposes and to further strengthen banking operations.
PNB’s president and CEO Omar Mier said in a statement, “We did not expect such an overwhelming demand for our LTNCDs during our first issuance, which carried the lowest ever coupon rate of its kind.This prompted us to issue a second tranche of LTNCDs which has proven equally successful. The robust appetite for PNB’s issuances shows our growing competitiveness in the local market.”
LTNCDs are negotiable certificates of time deposit with a designated maturity or tenor representing a bank’s obligation to pay the face value upon maturity as well as make periodic coupon or interest payments during the life of he deposit. Additionally, LTNCDs are insured by the Philippine Deposit and lnsurance Corporation (PDIC) for up to 500,000 and are tax exempt for qualified individuals if held for at least five years.
PNB was able to raise PhP4 billion from the second issuance of LTNCDs. The LTNCDS carry a maturity of five and a half years and have a coupon of 3.25% per annum. The public offer period ran from October 9 to 16, 2013. The issue date will e on October 21, 2013.
The Hongkong and Shanghai Banking Corporation Limited (HSBC) acted as the sole lead arranger and selling agent of the issuance. In addition to HSBC and PNB, First Metro Investment Corporation (FMIC) and Multinational Investment Bancorporation (MIB) also acted as selling agents while Deutsche Bank AG, Manila Branch acted as registry and paying agent.
HSBC Philippines president and CEO Wick Veloso commented, “It is not often that we see a bank such as PNB offer two LTNCD tranches in one year. The fact that both issuances were executed successfully is a testament to the growth of PNB and the support given to them by customers and investors.”
PNB is now the fourth largest privately owned bank in the Philippines, following its recent merger this year with allied Banking Corporation. PNB’s total assets amounted to PhP563 billion as of the first half of 2013. PNB has experienced rapid growth; as evidenced by a net income of PhP5.3 billion, a 186% increase from the same period last year.