Philippine Daily Inquirer
7:02 pm | Sunday, October 20th, 2013
A number of big Philippine banks are raising fresh funds from the rollout of long-term negotiable certificates of deposits (LNTCDs), tapping the cash-rich domestic market to boost funds for lending and expansion.
Tycoon Lucio Tan-led Philippine National Bank announced on Friday it had concluded its second LNTCD for the year, raising P4 billion from an oversubscribed offering of LTNCDs with a tenor of five and a half years and coupon of 3.25 percent a year.
Separately, Union Bank of the Philippines raised P3 billion of LTNCDs due April 2019 at a coupon rate of 3.5 percent a year.
On Thursday last week, Rizal Commercial Banking Corp. also launched offering of LNTCDs worth as much as P5 billion with a tenor of five years and six months at an indicative interest rate range between 3.25 percent and 3.5 percent a year.
LTNCDs are negotiable certificates of time deposits and are tax exempt for qualified individuals if held for at least five years.
The LTNCDs are insured by the Philippine Deposit Insurance Corp. (PDIC) up to a maximum coverage per depositor, currently at P500,000.
These are bank products with long tenors, usually five to 10 years, which are offered to investors looking for a higher interest rate compared to regular savings accounts or shorter-term deposits.
PNB president Omar Mier said the new issuance of LNTCDs after an earlier offering completed in July was to address unmet demand from customers. Proceeds are meant for general corporate purposes and to boost banking operations.
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Tags: Banking , Business , economy , Lucio Tan , News , Philippine National Bank
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