Via ODiSy March 22, 2012 PHILIPPINE STOCK EXCHANGE ... - BDO

- 99 -Parent Bank2011 2010 2009Senior notes P 511 P 98 P -PDIC 175 175 175Foreign banks 182 69 112Deposit substitutes 172 285 422BSP 27 121 254SMPHI - - 127Local banks - - 27Others 158 243 303Senior NotesP 1,225 P 991 P 1,420On October 22, 2010, BDO Unibank Group issued Senior Notes with a face value ofUS$300 million at a price of 99.632 or a total price of US$299 million. The SeniorNotes, which will mature on April 22, 2016, bear a fixed interest rate of 3.875% perannum, with an effective rate of 3.95% per annum, and will be payable semi-annuallyevery April 22 and October 22 starting in 2011. The net proceeds from the issuance areintended to support business expansion plans, and general banking and relendingactivities. As of December 31, 2011 and 2010, the Senior Notes have a carrying amountof P13,210 and P13,202, respectively, and are presented as part of Bills Payable in thestatements of financial position. Interest on Senior Notes incurred amounted toP511 in 2011 and P98 in 2010 recognized in profit or loss and included as part ofInterest Expense on Bills Payable and Other Liabilities account on an amortized costbasis using the effective interest method (see Note 21).PDICThis represents the financial assistance to United Overseas Bank Philippines (UOBP)from PDIC amounting to P4,420 which was transferred by UOBP to the Parent Bank.The transfer was covered by the MOA relative to the Parent Bank's acquisition ofUOBP branches in 2005. The financial assistance, which is recorded as part of BillsPayable in the statements of financial position will mature on December 19, 2012 andbears annual interest rate of 3.9%. The proceeds of the financial assistance from PDICare invested in government securities as provided for in the MOA.SMPHI (Preferred Shares)As required under PAS 32, Financial Instruments: Presentation and Disclosure, the ParentBank recognized as financial liability 25,000,000 shares of redeemable, cumulative andnon-participating preferred shares with a par value of P10 per share issued to SMPHIon October 18, 2004. The preferred shares were issued at US$2 per share or anaggregate subscription price of US$50 million. The preferred shares entitled SMPHI tocumulative dividends, payable in US dollars semi-annually in arrears, equal to 6.5% ofthe issue price per annum.As required by BSP, the Parent Bank set up a sinking fund on October 17, 2005 forthe redemption of the preferred shares. The balance of the sinking fund as ofDecember 31, 2008 amounted to P2,110 and was invested in debt securities, shown aspart of HTM investments.