PNB to raise another tranche of Peso LTNCDs

After successfully issuing PHP 5 billion worth of long-term negotiable certificates of time deposit (LTNCD) last August 5, 2013, Philippine National Bank (PNB) intends to raise another tranche of LTNCDs this month. The proceeds from the issuance will continue to support PNB’s business expansion plans, and shore up its source of longer term funding.

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 the deposit. These deposits are covered by deposit insurance with the Philippine Deposit Insurance Corporation up to a maximum of Php 500,000 per depositor.

Similar to the recent LTNCDs issued by PNB, the new tranche of LTNCDs will have a maturity of five and a half years. The indicative pricing will be within the 3.00%-3.25% range, and will be finalized during the public offer period, which will run from October 9 to 16, 2013. PNB has the discretion to close the offer period earlier.

Interest is paid quarterly, and is tax-exempt for qualified individuals if held for at least five years. The minimum denomination of the LTNCD is Php 500,000 with increments of Php 100,000 thereafter.

PNB has hired the same parties to assist in the offering, namely: The Hongkong and Shanghai Banking Corporation Limited (as sole lead arranger and bookrunner, and as selling agent), First Metro Investment Corporation (FMIC), and Multinational Investment Bancorporation (MIB) (both as selling agents), and Deutsche Bank AG, Manila Branch (as registry and paying agent).

PNB has experienced significant growth since its merger with Allied Banking Corporation last February 9, 2013. The combined client base of the merger has brought a wider distribution network of 653 branches nationwide as of June 30, 2013. In addition, PNB still has the widest international footprint among Philippine banks located in Asia, Europe, Middle East and North America.

With the enhancement of PNB’s position, its consolidated total assets are now at PHP 563.4 billion, total capital at PHP 83.3 billion and total deposits at PHP 419.7 billion as of June 30, 2013. As a result of the expansion and fervent focus to continue growing its business and improve operational efficiency, PNB is now ranked as the fourth leading private commercial bank in the country as of today.