Security Bank offers P5B in CDs tranche

Listed lender Security Bank Corp (SBC), the country’s fifth largest private bank in terms of assets and capital as of June 30, has launched its initial tranche of long term certificates of deposit (CDs) last October 17 in line with the Bangko Sentral ng Pilipinas’ (BSP) approval to issue CDs dated October 5.

For the first tranche, Security Bank intends to offer at least P5 billion worth of CDs, and may upsize the transaction depending on demand.

It will have a tenor of five years and six months and will be marketed at an indicative rate of 3.875 per annum.

Security Bank is offering the CDs to better manage their liabilities and ratios, while also expanding their funding and investor base.

CDs have been an effective way for banks to raise cost-effective funding, while offering a new investment product to their own deposit base, most of whom are looking for long term assets that provide higher yields than traditional time deposits..

HSBC and Standard Chartered Bank were mandated as joint lead arrangers and bookrunners, and also act as Selling Agents together with Security Bank and Multinational Investment Bancorporation.

The final rate for the CDs will be determined during the public offer period, which will run from October 17 to October 30, 2017. Minimum denominations have been set for P50,000 and increments of P10,000 thereafter.

To further promote the investment instruments, Security Bank held a multi-city roadshow in Park Inn by Radisson, Clark, Pampanga last October 17, Park Inn by Radisson, Davao last October 18, and in Marco Polo Plaza, Cebu last October 19.

Investors were briefed about Security Bank’s recent developments and performance, and the terms and conditions of the CDs.