Money

Security Bank offers P5B high-yield deposit instruments

The country’s sixth largest lender by assets launched the offering of new long-term negotiable certificates of deposit (LTNCDs) worth P5 billion to fund expansion plans.

The country’s sixth largest lender by assets launched the offering of new long-term negotiable certificates of deposit (LTNCDs) worth P5 billion to fund expansion plans.

Proceeds from the offering will be used by Security Bank to extend the term of its liabilities, expand its funding base, and to fund asset build-up.

Security Bank has the option to jack up the issue size, depending on market demand. The offering which kicked off today (Aug. 13) will run until Sept. 4.

The high-yieldiing deposit instruments have a term of 5 1⁄2 years with indicative pricing of 3.75%-4%. Interest will be paid quarterly in arrears.

LTNCDs are negotiable certificates of deposit with a designated maturity and represent a bank’s obligation to pay the face value upon maturity, with periodic coupon or interest payments during the life of the deposit. They are attractive investments especially for individuals, as interest income is exempt from withholding taxes if the LTNCDs are held for at least five years.

Deutsche Bank AG is the sole lead arranger and selling agent for the issue, while Security Bank is the other selling agent.

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