China Banking Corp., the eighth-largest lender in terms of assets, said it will raise up to P20 billion from the issuance of long-term negotiable certificates of time deposits to support strategic initiatives and business growth.
China Bank said in a disclosure to the stock exchange Monday the issuance was recently approved by Bangko Sentral ng Pilipinas. China Bank said the approval would enable it to issue multiple tranches of LTNCDs with tenors ranging from five to 10 years.
“The LTNCDs will be offered at a rate of 3.25 percent per annum, payable quarterly. The minimum investment size is set at P50,000 with increments of P50,000 thereafter,” China Bank said.
An initial offering of at least P5 billion will be raised with a fixed rate and a maturity of five years and six months from issue date. The public offer period for the first tranche runs from Nov. 7 to Nov. 11, 2016.
China Bank and the joint lead arrangers retained the option of adjusting the offer period as it deems necessary. LTNCDs are time deposits that have longer maturity and are higher yielding than regular deposits. These instruments are negotiable and insured with the Philippine Deposit Insurance Corp. up to a maximum coverage which is currently at P500,000 per depositor.
“This new issuance is expected to expand the bank’s long-term deposit base and boost its long-term asset growth,” China Bank said.