The Market Monitor Minding the Nation's Business
The Bangko Sentral ng Pilipinas (BSP) has approved listed China Banking Corp.’s (China Bank) plan to issue up to P20 billion in long-term negotiable certificates of time deposits (LTNCD).
China Bank said the float will finance projects that will support its strategic initiatives and business growth for the coming years.
Under the approved issue, the LTNCDs will have tenors ranging between 5 to 10 years and with rate of 3.25 percent per annum payable quarterly.
The transaction marks the return of China Bank to the Peso debt market after its successful initial LTNCD transaction in 2008, when it successfully offered its five-year P5 billion LTNCD maiden issue.
The new issuance is expected to expand the Bank’s long-term deposit base and boost its long-term asset growth according to China Bank.
LTNCDs are time deposits that have longer maturity and are higher yielding than regular deposits.
These debt instruments are negotiable and insured with the Philippine Deposit Insurance Corp. (PDIC) up to a maximum coverage which is currently at P500,000.00 per depositor.
The minimum investment size is set at P50,000 with increments of P50,000 thereafter.
An initial offering of at least PHP5 billion will be raised with a fixed rate and a maturity of 5 years and six months from issue date. The public offer period for the first tranche will run from November 7, 2016 until November 11, 2016.
China Bank and the Joint Lead Arrangers retain the option of adjusting the offer period as it deems necessary.
Australia and New Zealand Banking Group Ltd (ANZ), The Hongkong and Shanghai Banking Corp. Ltd. (HSBC) and Standard Chartered Bank (SCB) have been appointed Joint Lead Arranger, Joint Bookrunner and Selling Agents for the transaction.
China Bank, China Bank Capital Corporation and Multinational
Investment Bancorporation (MIB) will also serve as selling agents for the offering. The instrument will likewise be listed on the Philippine Dealing and Exchange Corporation (PDEx) platform. RIZA LOZADA