Limited-time offer! Earn higher returns
with a safe, medium-term investment.
Offer period is closed.
Due to strong demand, offer period is now from June 23-July 3. Please note that orders may be subject to final allocation.
The SBC Fixed Rate Corporate Peso Bond is specifically intended to mobilize savings and encourage medium term investments.
Looking for a medium-term investment with a higher interest rate? This is for you.
|Issuer||Security Bank Corporation (“SECB”)|
|Rate||3.125% p.a. (subject to 20% withholding tax and 0.10% p.a. Trust Fee)|
|Issue Price||100% of the face value|
|Issue Date||July 24, 2020|
|Interest Periods||Quarterly, 30/360 day count basis|
|Denomination||Minimum denomination of PHP 1,000,000 and increments of PHP 100,000 thereafter.|
|Taxation||Interest received by investors will be net of applicable witholding tax.|
For more details, you may download the preliminary offer circular through this link.
Note: SECB, the Sole Bookrunner, and the Joint Lead Arrangers reserve the right to revise the timetable at any time
You can buy/sell the bonds in the open market.
Your income stream is fixed regardless of market changes.
Rate of 3.125% per annum.
For Individual Clients
For Corporate Clients
While fixed income securities are considered alternative investment products that can provide relatively higher yield than other traditional bank products, which has a different type of risk profile and may not be appropriate. You should not deal in fixed income securities unless you understand their nature and the extent of your exposure to the attendant risks. And even assuming that you understand the nature of these investments, you should not deal with the same unless the product is suitable for you in the light of your circumstances, experience, financial position and operational resources. The following is a brief summary of certain risk considerations which you should take into account in deciding whether to purchase fixed income securities. This list is not exhaustive; rather it is intended to highlight certain risks that could be related to your investment.
To download the Offering Circular, click here.
What are Peso Bonds?
Peso Bonds represent amount of indebtedness of a bank with a designated maturity. The Peso Bonds form part of a bank’s debt and rank at least pari passu with all unconditional, unsecured and unsubordinated Peso-denominated obligations of the Bank (save for any such obligation enjoying statutory preference or priority established under Philippine law).
How does it differ from a regular Time Deposit
A long-term time deposit cannot be transferred while it is outstanding; whereas a Peso Bond may be negotiated even while outstanding but only through the market maker or the organized exchange where it is listed.
Why invest in Peso Bond?
Peso Bond are specifically intended to mobilize savings and encourage medium term investments. Peso Bonds act as an alternative to time deposits.
What are some of the risks involved in investing in Peso Bonds?
Yield on the Peso Bond is fixed if the investor holds the Peso Bond until maturity. However, if an investor sells the Peso Bond in the secondary market, the Peso Bond will be subject to a price risk depending on the prevailing market rate. The prevailing price of the Peso Bond, like that of any other fixed rate negotiable instrument, may be higher or lower than the original purchase price. Applicable withholding taxes (WHT) and other fees may likewise apply.
What are the tax implications of investing in the Peso Bonds?
Tax on interest income: Interest income on the Bonds is subject to a final withholding tax at a rate of 20% subject to exemption or preferential tax rates under relevant law, regulation or tax treaty.
In case of Early Redemption by the Bank: As a consequence of the exercise of the Early Redemption Option, any incremental tax that may be due on the interest income already earned under the Initial Tranche of the Peso Bonds prior to or as a result of the exercise by the Bank of its Early Redemption Option shall be for the account of the Bank.
Why is the Bank doing a Peso Bond issuance?
The issuance is in line with the Bank’s program to diversify its funding sources and to support its lending actiivities.
Who are eligible to invest in the Peso Bonds?
Any person or entity may purchase the Peso Bonds EXCEPT the following prohibited investors:
For purposes of the definition of Prohibited Bondholders, a “subsidiary” means, at any particular time, a company which is then directly controlled, or more than fifty percent (50%) of whose issued voting equity share capital (or equivalent) is then beneficially owned by the Bank and/or one or more of its subsidiaries or affiliates. An “affiliate” means, at any particular time, a company at least twenty percent (20%) but not more than fifty percent (50%) of whose issued voting equity share capital is then owned by the Bank. For a company to be “controlled” by another means that the other (whether directly or indirectly and whether by the ownership of share capital, the possession of voting power, contract or otherwise) has the power to appoint and/or remove all or the majority of the members of the board of directors or other governing body of that company or otherwise controls or has the power to control the affairs and policies of that company.
How much is the minimum investment?
The Peso Bonds will be issued with a minimum investment size of PHP 1,000,000, with increments of PHP 100,000 thereafter.
How do I receive my principal and interest?
Investors will be required to specify in the Application to Purchase (ATP) their preferred mode of payment for the interest and principal. Options include:
Are the Peso Bonds insured?
No, unlike LTCNDs, Peso Bonds are not insured by the PDIC.
Can the Peso Bonds be pre-terminated by the Holders?
No. Bondholders are not allowed to pre-terminate the Peso Bonds prior to stated maturity. However, they may transfer their holdings in the secondary market. Such transfer or assignment will not be considered a pre-termination. The Bank intends to list the Peso Bonds on PDEx on issue date. Assuming the successful listing of the Peso Bonds, a Bondholder may transfer the Peso Bonds through any trading participant (accredited with the PDEx) at prevailing market prices and will be subject to brokerage and other fees imposed by the trading participant.
When will investors receive interest payments on the Peso Bonds?
Investors will receive interest payments on a quarterly basis.
Is there tiered or incremental interest rate applied?
Unlike regular time deposits, where the interest rates may increase based on the amount or tenor, the Peso Bonds will offer a fixed coupon rate to all investors throughout the tenor of the Peso Bonds.
Can an investor still purchase the Peso Bonds after the public offering?
Yes. After the public offer, an investor may purchase the Peso Bonds through the secondary market. The Bank intends to list the Peso Bonds on PDEx on issue date. Assuming the successful listing of the Peso Bonds with the PDEx, an investor may purchase the Peso Bonds through any trading participant (accredited by PDEx) at prevailing market prices and will be subject to brokerage and other fees imposed by such trading participant.
What is the general process of transferring the Peso Bonds in the secondary market?
In executing a sale of the Peso Bonds, the selling Bondholder shall surrender to the trading participant its/his/her original Registry Confirmation (RC), together with the Trade-Related Transfer Form and a Letter of Instruction to Sell. The proceeds of the sale shall then be delivered to the selling Bondholder.
To effect the transfer of ownership of the relevant Peso Bonds from the selling Bondholder to the buyer, the trading participant shall (a) surrender to the Registrar selling Bondholder’s original RC for cancellation and (b) provide the Registrar with the following documents: (i) the original Investor Registration Form,(ii) the written consent of the buyer to be bound by the terms of the Peso Bonds and the rules of the Registrar and (iii) such other documents as may be reasonably required by the Registrar. The buyer shall then receive a Confirmation of Sale from the trading participant and an original RC from the Registrar.
The sellers and buyers of the Peso Bonds may be charged certain transaction related fees by the Registrar.
Is partial sale of Peso Bonds allowed?
Yes. In the event that the Bondholders would like to sell only a portion of their amount, a Trade-Related Transfer Form and Letter of Instruction to Sell will be required, provided that the required minimum denomination for Peso Bond is maintained. The original RC will be retained with the selling Bondholder. The Registrar will issue a Statement of Account for the selling Bondholder outstanding balance.