THE YUCHENGCO-LED RIZAL Commercial Banking Corp. has offered a second tranche of US dollar-denominated negotiable certificates of time deposits (NCTDs), targeting an issue size of about $50 million.
This follows a successful issuance of $85 million worth of these instruments in September.
The new NCTD offering will be a separate issue but, like the September offer, it will carry a fixed yearly interest rate of 3.75 percent, payable quarterly until they mature three years from issue date or around October 2012, the bank said in a statement yesterday.
Interest on the NCTDs is subject to a 7.5-percent withholding tax.
The NCTDs are senior deposit obligations of the bank and will be offered in minimum denominations of $5,000 and in increments of $1,000. These instruments are negotiable and transferable in the secondary market via a market maker and will be covered by Philippine Deposit Insurance Corp. up to the specified limits.
The offering starts today and will end on Oct. 15, although the offer period may be adjusted, the bank said.
?We are not targeting a specific amount. We opened a new tranche because there was demand from branches. Also, the typhoon prevented some clients from buying in the first tranche,? said RCBC first vice president for treasury Raul Tan.
Sources, however, said the bank wanted to raise about $50 million from this new round of offering.
The offering seeks to take advantage of ample foreign exchange liquidity in the country. Proceeds can be used by the bank to expand the foreign currency deposit unit (FCDU) book of RCBC.
An FCDU is a unit of a local bank or a local branch of a foreign bank authorized by the Bangko Sentral ng Pilipinas to engage in foreign exchange-denominated transactions such as accepting foreign currency deposits and granting of foreign currency loans.
More than $1 billion in overseas Filipino remittances enter the Philippines monthly through the banking system. RCBC is among the biggest players in the cash transfer business.
FCDU deposits are considered as the country?s secondary layer of foreign exchange reserves.
