Manila, Philippines

Better than Usual Time Deposits: Lend Money to BDO via LTNCDs, to Petron via Preferred Shares

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Yes, even retail investors like us with lower capital can actually lend money to big companies like BDO and Petron for their business operations.


Listed unibank BDO (PSE: BDO) issued a press release this morning that it shall be issuing LTNCDs starting today, March 27. The bank expects to generate at least PHP5-billion from this, which they shall use to extend the maturity of their funding sources and to support business expansion. Below are the terms:

  • 5 and 1/2 years maturity
  • Indicative interest rate of 5.125% to 5.5% p.a.
  • Minimum investment is PHP100,000, with increments of P50,000
  • Offer period is Mar 27 to April 12 (but BDO can adjust this as necessary).

What’s an LTNCD?

As a refresher, Long-term Negotiable Certificates of Deposits are bank obligations to the investor/ lender, that yields a higher interest compared to a normal time deposit, plus the interest income is tax-exempt if you hold it for at least 5 years! The LTNCD is also covered by PDIC guarantee, just like normal deposits. Juan can also sell the negotiable certificates of deposit to the secondary market in case he needs the funds already. Read here to know more about LTNCDs.

If interested, go to your preferred BDO branch now to inquire.


Petron to Issue Preferred Shares

Meanwhile, Petron Corp (PSE: PCOR) is also readying to solicit more investments from the public by virtue of preferred shares.

In general, preferred shares have priority over common shares of stock, in terms of dividend payments because preferred shares have fixed and guaranteed dividends (similar to the interest rate quoted for time deposits) while common stocks do not always get dividends.

Juan can get preferred shares at issue price from issuing banks and brokers before the official listing of the preferred shares in the stock market. Or if Juan will only have money at a later date, Juan can still buy preferred shares in the stock market (via brokers, online or traditional) after the listing. Note though that this is already already subject to prevailing market price of course.

Petron aims to raise PHP15-billion to PHP20-billion from this exercise. It’s sister company, San Miguel Corp (PSE: SMC), also issued preferred shares a few years back (read more on SMC Preferred Shares) with codes SMC 2G, 2H and 2I.

Petron is working on the paperwork and approval process before they release the official terms of the preferred shares. Watch this space and follow us for updates.

Looking for more investment options? Download our #10Steps to a Richer Life to learn more investment options, and find out why WISER PINOY = RICHER PINOY.

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