MANILA, Philippines — Metropolitan Bank & Trust Co. has mandated Standard Chartered Bank (Stanchart) as the sole arranger for the first tranche of its P100 billion bond program to support the bank’s lending activities and diversify its funding sources.
In a disclosure to the Philippine Stock Exchange (PSE), Metrobank said it is looking at raising at least P2 billion with an option to upsize.
“The first tranche will have a tenor of two to five years to be priced using the applicable peso benchmark. Issue size will be determined through a book-build process,” Metrobank said.
The bank said the timing of the fund raising activity would depend on market conditions.
Last month, the bank’s board of directors approved a P100-billion Philippine peso bond and commercial paper to be issued in one or more tranches and tenor of at least three months.
The Ty-led bank raised P60 billion from the sale of new shares to existing shareholders led by GT Capital Holdings through a stock rights offer last April to further enhance its capital ratios, keeping it well above the Basel III requirements.
It is also raising P25 billion from the issuance of long-term negotiable certificates of time deposits (LTNCDs). The bank has so far raised P26.65 billion from previous issuances of LTNCDs including P8 billion in October 2014, P6.25 billion in November 2014, P8.65 billion in September 2016, and P3.75 billion in July last year.
More banks are now shifting to the issuance of bonds and commercial papers instead of LTNCDs after the Bangko Sentral ng Pilipinas (BSP) released the enhanced guidelines for the fund raising activity.
Aside from Metrobank, banks that have announced plans to issue bonds and commercial papers include BDO Unibank of retail and banking magnate Henry Sy with P100 billion, Ayala-led Bank of the Philippine Islands with P50 billion, Philippine National Bank (PNB) of tobacco and airline giant Lucio Tan with P20 billion, and Aboitiz-led Union Bank of the Philippines with P20 billion.
Earnings of Metrobank rose 16 percent to P11 billion in the first half from P9.5 billion in the same period last year after a strong second quarter on the back of the solid performance of its core businesses.