Moody’s said in a statement that the rating reflected the proposed issue’s subordination to senior bank obligations and recognized what it called Metrobank’s "moderate" capability to service its debt obligation, given its financial profile.
According to Moody’s, Metrobank was characteristic of banks with D bank financial strength ratings. The rating was assigned on condition that no material changes are made to the terms and conditions of the notes reviewed.
Despite the subordinated status of the proposed notes, Moody’s analyst John Tham at the Financial Institutions Group of Moody’s Singapore Pte. Ltd. said that the issue was rated above MBT’s deposits, which are constrained by the Philippines’ foreign currency deposit ceiling.
"Moody’s believes that the risk associated with the subordinated status is mitigated by the low likelihood that the bank would face regulatory intervention that could potentially prompt credit losses for the noteholders, Tham said. "In our opinion, as the Philippines’ largest bank, MBT would receive strong regulatory support if needed."
Metrobank had total assets of P472.5 billion as of Dec. 31, 2002.
Established in 1962, the bank grew rapidly and secured its dominant status with the acquisition of three smaller banks in late 1999.
Metrobank is the flagship of the Metrobank Group of Companies, which has also Diversified interests in automobile sales, insurance, leasing, stockbroking and travel.
Moody’s other rating for the bank are: Subordinated debt rating of Ba1; long-term/short-term deposit ratings of Ba2/not prime and bank financial strength Rating of D. The ratings carry a stable outlook. – Des Ferriols