By: Maricel E. Burgonio, InterAksyon.com November 25, 2013 7:38 PM
MANILA - The Bangko Sentral ng Pilipinas (BSP) has cleared East West Banking Corp's P5-billion fundraiser, comprising the second trance of its long-term negotiable certificates of time deposit (LTNCDs).
In a statement, EastWest said it began today its six-month offering of the LTNCDs.
LTNCDs are time deposits that have longer maturity and provide higher returns. They cannot be pre-terminated but can be sold in the secondary market to other investors.
The certificates are tax-free if held to maturity and are covered by the Philippine Deposit Insurance Corp up to a maximum of P500,000 per depositor.
For the issuing bank, LTNCDs are a cheaper and faster way of raising capital, as compared with longer-term bonds or shares of stock.
EastWest's second-tranche LTNCDs will mature on June 5, 2019 and will carry a yield of between 3.125-3.375 percent per annum depending on market conditions.
The final price will be set on or before the end of the first offering on November 29.
EastWest’s net income grew by 28 percent to P1.7 billion in the third quarter. Its capital adequacy ratio of 17.1 percent is higher than the minimum 10 percent required by the Bango Sentral ng Pilipinas. The lender's tier 1 ratio stood at 13.8 percent, also above the regulatory requirement.
EastWest is a subsidiary of the Filinvest Development Corp (FDC), the holding company of the Gotianun family, which has interests in real estate, sugar, hospitality and tourism, and power generation.