Tan-led PNB to redeem P6.5B notes in June
Listed Philippine National Bank (PNB) of Bilyonaryo Lucio Tan is redeeming P6.5 billion worth of debt notes qualifying as tier 2 capital ahead of schedule to avoid paying higher interest rate.
The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) gave the bank the green light to redeem the 6.5 percent lower tier 2 debt notes due in June 2021 on June 16.
The central bank?s Monetary Board issued Resolution No. 588 last March 31 approving the request of PNB to exercise its call option on the debt notes.
The listed bank said the notes would be redeemed on June 16 at an amount equal to the aggregate issue prices of the notes plus accrued and unpaid interest up to but excluding the call option date.
It added the call option amount would be paid to all holders on record as of June 1. No transfers shall be allowed from June 1 to 15.
PNB issued the lower tier 2 unsecured subordinated notes in June 2011 to refinance PNB?s P5.5 billion tier 2 notes and at the same time finance asset growth and boost capital base.
The Tan-led bank has the right to redeem the notes after the end of the fifth year.
Companies usually are given an option to redeem the debt papers at a certain date or otherwise pay higher interest rate.
Profits of PNB grew 15 percent to P6.8 billion last year from P5.9 billion in 2014 on continued improvements on earnings from its core business particularly net interest income and net service fees and commissions.
The assets of the Tan-led bank increased by nine percent to P679.7 billion last year.