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Philippine National Bank to raise $1 billion via medium-term note program

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PNB
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PHILIPPINE NATIONAL Bank (PNB) is looking to raise $1 billion in fresh funds through a euro-denominated medium-term note program, it announced on Thursday.

In a disclosure to the Philippine Stock Exchange, the Tan-led PNB said it will establish a $1-billion Euro Medium Term Note (EMTN) Program, as confirmed by its board.

PNB has authorized bank officials to select the arrangers, lead managers, book runners and co-managers and other third parties as well as determine the terms of EMTN issuance, among others.

Banks usually employ a note facility to raise more capital to fund its programs and operations by issuing unsecured fixed rate notes.

In March, Rizal Commercial Banking Corp. (RCBC) announced it upsized its own MTN program to $2 billion from the previous $1 billion to raise capital.

In October 2015, the Yuchengco-led RCBC raised $320 million from the issuance of unsecured fixed-rate notes as part of its $1-billion medium-term note program.

The issuance of the bank, which was offered in denominations of $125,000 and increments of $1,000 thereafter, will mature on Feb. 2, 2021 and was listed at the Singapore Stock Exchange.

PNB said in January that it is planning to raise up to P20 billion by selling peso-denominated long-term negotiable certificates of deposit (LTNCD).

The bank said the proceeds will be used to extend the maturity profile of PNB’s liabilities as well as to raise long-term funds to support its business.

LTNCDs are similar to regular time deposits which offer higher interest rates, but the difference is that these cannot be pre-terminated. Being “negotiable” means that these can be traded at the secondary market prior to maturity date.

PNB booked an P8.2-billion net income in 2017, 14% higher than the P7.2 billion it recorded the previous year on the back of the growth in its core operating income.

Shares in PNB rose by 0.64% or 35 centavos to finish at P55.25 apiece on Thursday. — K.A.N. Vidal