METROPOLITAN Bank & Trust Co. (Metrobank) is eyeing to issue up to P25 billion worth of long-term negotiable certificates of deposit (LTNCD) to raise fresh funds and diversify its sources of financing.
In a disclosure to the local bourse on Thursday, the Ty-led lender said its board of directors approved on Wednesday the issuance of P25-billion LTNCDs in one or more tranches, with at least P2 billion per tranche.
Metrobank said the notes will have a tenor of five-and-a-half to 10 years.
However, the fund-raising activity is still subject to regulatory approval and market conditions, it said.
Metrobank said yesterday that the LTNCD issuance is “for the purpose of diversifying the bank’s funding sources.”
Like regular time deposits offered by banks, LTNCDs offer higher interest rates. However, LTNCDs cannot be pre-terminated but can be sold on the secondary market, making them “negotiable.”
Earlier this month, Metrobank said is looking to raise at least P5 billion via peso-denominated bonds to support its lending business and expand its funding sources.
The bank said the issue will have a tenor of at least three-and-a-half years to be priced using the applicable interpolated PHP Bloomberg Valuation Service Reference Rate benchmark.
Metrobank said the final issue size, terms and the timetable will be based on market conditions.
The bonds to be issued are part of its P100-billion bond and commercial program.
Metrobank mandated ING Bank N.V.’s Manila Branch and Standard Chartered Bank as joint lead arrangers for the planned bond issuance.
The lender said it has raised some P56.75 billion via peso-dominated bonds since November 2018.
Metrobank raised P11.25 billion in fresh funds via two-year bonds in July, more than twice than the programmed P5-billion offering amid strong demand from investors. The notes carry a coupon rate of 5.5%. This was also part of its P100-billion bond program.
In April, Metrobank raised P17.5 billion via three-year bonds carrying a coupon rate of 6.3%. In November last year, the bank likewise raised P10 billion through two-year fixed-rate bonds with an interest rate of 7.15%. This issuance was reopened in December for another P18 billion offering.
Metrobank’s net income in the second quarter rose 15.5% to P6.48 billion from a year earlier, buoyed by sustained loan and margin growth as well as fee-based profit.
This brought the bank’s second-quarter earnings to P13 billion, 18% higher than a year earlier.
Shares in Metrobank closed at P68.35 apiece on Thursday, gaining 50 centavos or 0.74%. — Beatrice M. Laforga