METROPOLITAN Bank & Trust Co. (Metrobank) has raised P8.68 billion from the first tranche of its P25-billion long-term negotiable certificates of deposit (LTNCD) program meant to diversify its funding sources.
According to the Web site of the Philippine Dealing & Exchange Corp. (PDEx), the Ty-controlled Metrobank has raised P8.68 billion from the peso-denominated issue, more than the P5 billion it originally intended to raise.
The notes will mature in 5.5 years and carry a 5.375% rate to be paid quarterly.
The LTNCDs issued make up the first tranche of Metrobank’s P25-billion program approved by the central bank last July 19.
Standard Chartered Bank served as the sole lead arranger of the offer and was also a bookrunner alongside Metrobank. The banks also served as selling agents along with First Metro Investment Corp.
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.”
In a text message in September, Metrobank said the proceeds of the fund-raising activity will be used to “diversify the maturity profile of…funding sources and support business expansion plans.”
To date, Metrobank has outstanding securities amounting to P35.33 billion listed on the PDEx, with the latest offer in July last year, where it raised P3.75 billion.
Prior to this, Metrobank completed a stock rights offering in April, raising P60 billion to fund its business operations and expansion.
A number of banks have been tapping the capital markets in recent months to raise more funds ahead of tighter risk management measures that will take effect on Jan. 1, 2019 under the international Basel 3 standards.
Last week, Rizal Commercial Banking Corp. raised P3.58 billion worth of LTNCDs which will also mature in five years and six months.
Philippine Savings Bank, Robinsons Bank Corp. and China Banking Corp. also recently issued LTNCDs to support its funding needs.
Metrobank posted a P5.3-billion income in the second quarter, up 31% from the P3.9 billion tallied the previous year on the back of its robust core business.
Shares in Metrobank closed at P66 each on Thursday, down P3 or 4.35%. — Karl Angelo N. Vidal