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China Bank launches tranche 2 of P20-B LTNCDs

Monday, May 15, 2017

China Banking Corporation (China Bank, stock symbol CHIB) is launching the second tranche of its P20 billion long-term negotiable certificates of time deposits (LTNCD) after a highly successful issuance of P9.588 billion in LTNCDs last November 2016. This new issuance will boost the Bank’s long-term deposit base and its long-term asset growth.

The second tranche of the LTNCDs will have a tenor of five years and six months and will be offered at a rate of 3.65 percent per annum, payable quarterly. The minimum investment size is set at P50,000 with increments of P50,000 thereafter. Proceeds from the issuance will support the Bank’s strategic initiatives and business growth.

The Bangko Sentral ng Pilipinas gave China Bank the authority to issue LTNCDs in the aggregate amount of up to P20 billion in one or more tranches in October 2016, and up to one year from that date.

The public offer period for this tranche will run from May 15, 2017 until May 26, 2017 unless otherwise adjusted by China Bank and the Sole Arranger, Standard Chartered Bank, as they deem necessary.

LTNCDs are time deposits that have longer maturity and higher yields than the typical short-term time deposits. In addition, individual investors who are holding the LTNCD up to maturity enjoy tax-free interest. These instruments have the added advantage of being negotiable, meaning investors who might want to generate cash can sell them through the Philippine Dealing System (PDS) platform. These are also insured with the Philippine Deposit Insurance Corp. up to a maximum coverage which is currently at P500,000.00 per depositor.

Standard Chartered Bank has been appointed Sole Arranger, Bookrunner, and a Selling Agent for the transaction. China Bank, China Bank Capital Corporation, and Multinational Investment Bancorporation will also serve as selling agents for the offering, with the Philippine Depository and Trust Corp., continuing as Registrar and Paying Agent. The instrument will likewise be listed on the Philippine Dealing and Exchange Corporation (PDEx) platform.

Fitch Ratings affirmed the Bank’s Long-Term Issuer Default Rating at ‘BB+’ and its Viability Rating at ‘bb+’ with Stable outlook in February 2017, following an upgrade in July 2016.

China Bank won an unprecedented fifth PSE Bell Award for consistently being among the top 5 out of 268 listed companies for exemplary corporate governance practices. China Bank was similarly recognized for Best Bank Governance by London-based Global Banking and Finance Review, and Capital Finance International Awards, and cited by journal Corporate Governance Asia as Outstanding in Corporate Governance. It was also recognized as Banking and Finance Firm of the Year 2016 Philippines by UK-based Finance Monthly Global Awards.

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