SECURITY BANK Corporation (Security Bank) announced on January 29, 2012 that they are offering up to Php5.0 Billion in 7-year Long-Term Negotiable Certificates of Deposit (LTNCDs) to their individual and corporate clients.
LTNCDs are peso-denominated certificates of deposit that have a minimum tenor of 5 years and 1 day. Similar to regular time deposits, they give a higher rate of return for the depositor. LTNCDs are tax-free provided they are held to maturity; they cannot be pre-terminated, however, they can be sold in the secondary market to other investors or even used as loan collateral.
The LTNCD offer period is from January 30, 2012 to February 10, 2012 with target date of issue on February 17.
Minimum investment amount is Php50,000 with increments of Php10,000. The indicative rate for this offer is 5.25% net. LTNCDs are covered by the Philippine Deposit Insurance Corp. (PDIC) up to a maximum of Php500,000.
Deutsche Bank AG, Manila and Standard Chartered Bank were designated as joint lead underwriters for this LTNCD offering.
The funds raised from this LTNCD sale will be used to augment funds for the bank's lending business and refinance maturing obligations, according to Security Bank.
Security Bank has recently embarked on an aggressive expansion program aimed at building their loan portfolio, expanding branch network, and increasing customer base. This program began with the recent acquisition of Premiere Development Bank.
Security Bank is a medium-sized universal bank in the Philippines; they have consistently been one of the top financial institutions in terms of ROE.
UPDATE: Security Bank has closed the LTNCD offer on February 7, three days ahead of its intended end date due to oversubscription. Final interest rate is at 5.50% per annum.
