Philippine National Bank (PNB) is raising P2 billion in fresh funds from the issuance of long-term negotiable certificates of deposit (LTNCD) due 2025 to secure long term funding and to comply with liquidity ratios required by the central bank.

The second tranche of its P20-billion LTNCD program approved by the Bangko Sentral ng Pilipinas carries a tenor of 5.5 years with an indicative interest rate of 4.250 percent to 4.374 percent to be paid quarterly, the Lucio Tan-led lender told the stock exchange on Friday.

PNB set the offer period from 27 September until 4 October. Issue date, on the other hand, is scheduled on 11 October.

“PNB is offering the LTNCD to extend the maturity profile of the bank’s liabilities as part of overall liability management, to support compliance with required BSP liquidity ratios and to raise long-term funds for general corporate purposes,” PNB said.

PNB mandated Hong Kong and Shanghai Banking Corp. Ltd. as sole arranger for the transaction, while PNB, HSBC, First Metro Investment Corp. and Multinational Investment Bancorporation served as selling agents.

LTNCD are covered by the Philippine Deposit Insurance Corp. and are subject to its rules and regulations.

In February, PNB raised P8.22 billion from the first tranche of the LTNCD program. The certificates will also mature in 5.5 years and has an interest rate of 5.75 percent to be paid quarterly until 2024.

PNB’s net earnings declined 27.7 percent in the first half of 2019, to P3.9 billion from P5.4 billion in the same period last year, owing to the lack of non-recurring income present last year from the sale of foreclosed assets.

Shares of PNB were up 0.45 percent to P44.70 apiece as of 2:42 p.m. on Friday, 27 September.