Metrobank kicks off P25-billion LTNCD offer

MANILA, Philippines — The first tranche of the P25 billion fund raising activity of listed Metropolitan Bank and Trust Co. (Metrobank) kicked off yesterday to diversify the maturity profile of its funding sources and support the bank’s business expansion plans.

In a disclosure to the Philippine Stock Exchange, Metrobank said the offering of long-term negotiable certificates of time deposits (LTNCDs) at an interest rate of 5.375 percent per annum until Sept. 28.

Standard Chartered Bank is the sole arranger and bookrunner for the transaction, while selling agents are Metrobank, Standard Chartered Bank, and First Metro Investment Corp.

The LTNCDs with a tenor of between 5.5 and 10 years is being issued in one or more tranches of at least P2 billion per tranche to be listed on the Philippine Dealing and Exchange Corp. (PDEx).

Metrobank has so far raised P26.65 billion via the issuance of LTNCDs. It initially raised P8 billion in October 2014 followed by P6.25 billion in November 2014, P8.65 billion in September 2016, and P3.75 billion in July last year.

LTNCDs have been an effective way for banks to raise cost-effective funding, while offering a new investment product to their own deposit base, most of whom are looking for long term assets that provide higher yields than traditional time deposits.

Metrobank successfully raised P60 billion from the sale of new shares to existing shareholders led by GT Capital Holdings through a stock rights offering.

Furthermore, Metrobank said the additional capital would further enhance its capital ratios, keeping it well above the Basel III requirements.