BANK of the Philippine Islands, the fourth-largest lender in terms of asset, on Friday issued P12.2 billion in long-term negotiable certificates of time deposit to support its aggressive expansion plans.
BPI said in a statement to the stock exchange the issuance was met with strong demand, prompting the bank to increase the offering to P12.2 billion from an initial P5 billion, making the transaction the largest single LTNCTD issuance thus far.
The LTNCTDs were also listed on the same day at Philippine Dealing Exchange Corp., the first instrument listed by BPI in the fixed-income exchange. The listing allows investors to negotiate the instrument in the secondary market.
Bank president and chief executive Cezar Consing said the strong demand for the notes reflected the confidence of investors in BPI.
“The success of this offer will help us in our expansion plans as we continue to focus on shareholder value by pursuing sustainable growth and profitability,” Consing said.
The issuance was the first tranche of the P30-billion LTNCTD issuance program approved by the Bangko Sentral ng Pilipinas for BPI. In addition to supporting the bank’s expansion plans, the issuance will diversify the bank’s funding sources while offering investors an attractive investment instrument.
The LTNCTDs have a tenor of five-and-a-half years maturing on May 24, 2023 and an interest rate of 3.75 percent per annum payable quarterly.
LTNCTDs are peso-denominated certificates of time deposit with a minimum maturity of five years and are negotiable in the secondary market. LTNCTDs historically offer higher interest rates than regular deposits.
LTNCTDs are also insured with state-run Philippine Deposit Insurance Corp.
ING Bank N.V., Manila branch was tapped as the sole arranger for the issue and also acted as selling agent along with BPI Capital Corp. and BPI.
BPI plans to put up 20 to 30 more branches next year in a bid to widen its coverage nationwide and seize growth opportunities amid the growing economy.
Joseph Gotuaco, the bank’s executive vice president and head of retail client segment group, told reporters in an interview the Bangko Sentral earlier gave BPI the permission to put up around 50 to 60 branches and that the bank would “use up those licenses very soon between this year and next year.”
Gotuaco said BPI this year opened around 20 branches in different parts of the country. He said the bank would end the year with around 841 branches.