Metrobank offers LTNCDs

METROPOLITAN BANK & Trust Co. (Metrobank) started offering long-term negotiable certificates of time deposit (LTNCD) on Monday to diversify its funding sources.
In a notice published today, the bank said it is offering P5 billion worth of LTNCDs, with the option to upsize.
The notes being offered will mature in 5.5 years and will be sold in denominations of P50,000 and in increments of P10,000 thereafter.
The LTNCDs will carry a rate of 5.375% per annum to be paid quarterly.
The issuance constitutes the first tranche of its P25-billion LTNCD program approved by the central bank last July 19.
Metrobank said the sale is set to run until Sept. 28, with the issue date on Oct. 4. Both the offer period and issue date can be adjusted by the bank as it sees fit.
Standard Chartered Bank will serve as the sole lead arranger of the offer, which will be joined by Metrobank as bookrunners. The banks will also serve as selling agents alongside 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 April, Metrobank Head of Invesor Relations Juan Placido T. Mapa III said the bank’s LTNCD program is part of its plan to diversify its funding sources.
“The proposed LTNCD program is part of our overall objective of diversifying funding sources and raising long term deposits,” Mr. Mapa told BusinessWorld in April, adding the bank has been issuing long-term notes regularly in the past few years.
To date, Metrobank has raised P26.65 billion through issuances of LTNCDs, with the latest offer in July last year, where it raised P3.75 billion.
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. started to offer LTNCDs which will run until Sept. 21. The notes will also mature in five years and six months.
Other lenders such as Philippine Savings Bank, Robinsons Bank Corp. and China Banking Corp. have recently issued LTNCDs to support its funding needs.
Metrobank posted a P5.2-billion profit in the second quarter, up 31% from the P3.9 billion tallied a year ago on the back of its robust core business.
Metrobank shares closed at P68.90 apiece on Monday, climbing 30 centavos or 0.44%. — K.A.N. Vidal